Personal Tax

[Guest2]

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]

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

Am I missing something?

[bd6759]

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]

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]

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]

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]

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

[Guest2]

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.