Income tax refund - money in business bank account

[ninjamouse]

Following completing my self-assessment I don't need to pay as much tax as I thought.

This money is currently sitting in my business bank account where corporation tax and income tax accumulate as my company earn and pay myself. Question is, now I know how much personal tax I'm due, can my company just transfer an 'income tax refund' to my personal bank account?

[Clare@InTouch]

Income tax is a personal liability and should be paid from your personal bank account. The company account should only be used to pay PAYE, CT and VAT.

I'd recommend a chat with your accountant to clarify

[jamesbrown]

Following completing my self-assessment I don't need to pay as much tax as I thought.

This money is currently sitting in my business bank account where corporation tax and income tax accumulate as my company earn and pay myself. Question is, now I know how much personal tax I'm due, can my company just transfer an 'income tax refund' to my personal bank account?

You can take a director's loan if that's what you're getting at (subject to conditions), i.e. if you want to take upfront an amount equal to the anticipated refund and then pay this back to the company when you receive the refund from HMRC, which will be paid into your personal account. However, based on the phrasing of your question, you do appear to be confusing business and personal tax liabilities, which is a little worrying, so I suggest you speak to your accountant before doing anything.

You do have an accountant, right?

[TheCyclingProgrammer]

As Clare and jamesbrown have said; why is the money you've set aside for your personal tax bill sitting in the company bank account? You should be setting aside any money for your personal tax bill from the money you've actually taken out of the company (as dividends presumably, as any tax on your salary would be dealt with via PAYE).

[northernladuk]

Following completing my self-assessment I don't need to pay as much tax as I thought.

This money is currently sitting in my business bank account where corporation tax and income tax accumulate as my company earn and pay myself. Question is, now I know how much personal tax I'm due, can my company just transfer an 'income tax refund' to my personal bank account?

You can use it to pay for a Running a Business for Dummies book so you won't ask any more ridiculous questions in the future. Either that or an Accountancy for Dummies book so you get your SA right and know exactly how much it is next time.

In fact sod it. Get both, you need 'em.

[ninjamouse]

Hi, Yeah I do have an accountant who is unavailable, that is why I'm asking here.

I understand the Capital gains tax, VAT requirements from my company account. And yes I understand that I have to personally pay my income tax and NI.

When dividends or salary are paid to my personal account, the amount is taken after tax out of my company accounts - I guess that is what I'm doing wrong.

In a normal company, employees receive salary net of tax/NI, so why should my company be any different?

[dty]

Hi, Yeah I do have an accountant who is unavailable, that is why I'm asking here.

I understand the Capital gains tax, VAT requirements from my company account. And yes I understand that I have to personally pay my income tax and NI.

When dividends or salary are paid to my personal account, the amount is taken after tax out of my company accounts - I guess that is what I'm doing wrong.

In a normal company, employees receive salary net of tax/NI, so why should my company be any different?

If you were paying salary, it wouldn't be any different. But you're not, you're paying dividends.

[TheFaQQer]

I understand the Capital gains tax

Really? Where does capital gains tax come in - are you running an investment business?

[Clare@InTouch]

Hi, Yeah I do have an accountant who is unavailable, that is why I'm asking here.

I understand the Capital gains tax, VAT requirements from my company account. And yes I understand that I have to personally pay my income tax and NI.

When dividends or salary are paid to my personal account, the amount is taken after tax out of my company accounts - I guess that is what I'm doing wrong.

In a normal company, employees receive salary net of tax/NI, so why should my company be any different?

Capital Gains Tax is a personal liability too.

If you have a tax return that shows a liability then, regardless of how that liability arose, it's payable by you personally.

[TheFaQQer]

If you were paying salary, it wouldn't be any different. But you're not, you're paying dividends.

How do you know that - the OP specifically makes reference to "dividends or salary".