Limited Company accounting fees with a personal account manager for only £118 per month. We'll do your paperwork while you focus on running your business. We operate fixed fees, agreed in advance, ensuring there are never any nasty surprises.

Knowledge Base

The difference between company and personal money

04 February, 2009

Differentiating between company and personal money is a topic that is often misunderstood by new company directors.

It is important to remember that your company is a separate legal entity from you. Though you run the business, the funds belong to the company and are not available for you to use as your private bank account. If company funds are drawn without properly accounting for any tax or national insurance, it can have very serious implications on your business. You have to remember you are employed by your Limited Company; you are not ‘self-employed’, as this is a common mistake.

As a director and shareholder of your own business you can receive remuneration from your company as salary or as a mixture of salary and dividends, depending on your IR35 status.

In order to plan and administer your accounting and tax affairs you should assess the IR35 status of your contract and work practices for each assignment and certainly before you take income as a dividend. Trafalagar is only a phone call away and happy to discuss your IR35 status.

Your salary is a charge (cost) against company profits, whereas dividends are distributions of profit paid to the shareholders of the company after deducting all costs and expenses and the corporation tax charge on company profits.

You are entitled to claim business expenses from the company and you should consider the benefits of setting up a company pension scheme. With regards to company expenses, you need to account for these in the correct manner and keep expense records for any expense you claim back.

Limited Company accounting fees for only £148 per month. We do your paperwork, you focus on running your business. Find out more, or contact us today.