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Where Taxpayers and Advisers Meet

Personal Tax

Guest2
Posts:3
Joined:Thu May 25, 2023 1:39 pm
Personal Tax

Postby Guest2 » Thu May 25, 2023 1:50 pm

Hi,

Senario

Business owner has to pay £1500 personnal tax, Business owner creates invoice to a 3rd party for work for £1500, 3rd party then transfers the £1500 to the business owner personal account.

Business owner then pays his £1500 personal tax from there personnal account.

This is wrong, right?

Jholm
Posts:352
Joined:Mon Mar 11, 2019 4:22 pm

Re: Personal Tax

Postby Jholm » Fri May 26, 2023 4:20 pm

The business owner pays the tax using funds received from an invoice?

Am I missing something?

bd6759
Posts:4239
Joined:Sat Feb 01, 2014 3:26 pm

Re: Personal Tax

Postby bd6759 » Fri May 26, 2023 10:17 pm

Define “business”. Is it a sole trader, partnership or company?

One could say that a sole trader pays every penny of personal expenditure from money received from invoices. It’s the accounting that matters.

Guest2
Posts:3
Joined:Thu May 25, 2023 1:39 pm

Re: Personal Tax

Postby Guest2 » Tue May 30, 2023 8:59 am

Sorry

Limited Company.

Personnal Tax bill is £1500 for busness owner.

Business owner creates invoice for 3rd Party work of £1500 (no work carried out)

Business pays 3rd Party invoice of £1500 (no work carried out)

3rd Party then pays £1500 in to the business owner's personnal account.

Business owner then pays £1500 personnal Tax bill.

Does it matter how they got the money to pay personnal tax bill, as long as it is paid.?

I see this as the wrong way to do things?

Thanks

Jholm
Posts:352
Joined:Mon Mar 11, 2019 4:22 pm

Re: Personal Tax

Postby Jholm » Wed May 31, 2023 12:00 pm

Are you saying the 3rd party business paid the invoice of £1,500?

If so, why did they pay it if no work was carried out?

someone
Posts:688
Joined:Mon Feb 13, 2017 10:09 am

Re: Personal Tax

Postby someone » Wed May 31, 2023 1:25 pm

It's complete speculation but I read this as:

Company C has director P.

P issues invoice to C for work done as P the individual (there was no work done but I'm not sure that matters)

C pays invoice into P's personal bank account

P uses money to pay personal tax bill.


If C truly is a third party unrelated to P then as far as I can see, so long as P accounts for their income correctly, I don't see there's any problem from P's PoV. Although I don't know why C would pay P for nothing, that sounds dodgy - but if C really is in the business of giving out money for nothing other than sending them an invoice then could we all have the name and address of C please?

bd6759
Posts:4239
Joined:Sat Feb 01, 2014 3:26 pm

Re: Personal Tax

Postby bd6759 » Thu Jun 01, 2023 7:50 am

Why are you asking this? It is quite clearly fraud.

Guest2
Posts:3
Joined:Thu May 25, 2023 1:39 pm

Re: Personal Tax

Postby Guest2 » Thu Jun 01, 2023 4:50 pm

Thanks for the replies.

Postby bd6759 »Thu Jun 01, 2023 7:50 am

Why are you asking this? It is quite clearly fraud. - This is why I am asking, to make double sure if wrong.




So yes, Director/company invoices 'other' for "weekend work" no work takes place, invoice is paid to 'other' of £1500.

Other pays Director to personal account £1500 to pay for personal tax owed.

Thanks again.


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