Quote:
Originally Posted by bjlover
Not if they was using the account as a personal bank account not a business account.
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It's not quite that straightforward.
If I had received a business receipt in my personal account that money would still show on my company balance sheet as an asset in the form of a debt from myself to the company. If that money disappeared, the debt would still be written off to the profit and loss account.
It's more complex when you're self-employed and not operating through a company. It's not the 'personal' or 'business' label on the account that's important, but the nature of the transactions that pass through it.
If you're receiving business receipts into an account then just drawing all that money out for personal use, then that account will be regarded as a personal account.
However, if you can demonstrate that the account is predominantly used for business purposes - for example, if everything you receive is paid out to business suppliers or transfered out to a business bank account - then the account will be regarded as a business asset.
If you have money locked in an account which is, by nature of its transactions, a personal account then you only have yourself to blame when it comes to taxation. You've already
de facto taken the money from your business, including the money that you'll eventually be expected to hand over to the IRS or HMRC.