Referral Fee received. Now what?

[I just need to test it]

My Ltd Company's bank account has been swelled by a $2000 referral fee.

Who's is it? Mine? My company's? Can I draw it from my Ltd Co's account with reckless abandon and rush off to Fortnum and Mason? Is it subject to CT?

[Clare@InTouch]

What was it for? A few more details would help me give a specific answer.

If it's been paid into your company then I'd guess it belongs to your company, and is likely subject to CT. You can spend it, but only if you withdraw it as a dividend, salary or loan - the same as any other company money you want to take out.

[northernladuk]

Hmm money in your company account and you are asking who's it is?

[TheFaQQer]

What does your accountant say?

I don't see how you can just withdraw it from the company and pocket it yourself without accounting for it in some way - even if the money had been paid directly to you, then you'd have to declare it and pay tax on it.

[Fandango]

As it's hit your companies bank account I'd assume its going to be classed as income and therefore subject to the usual CT at the end of the year.

Should have got it paid into your personal bank account then Hector would have been none the wiser

[kal]

If it was you (in a personal capacity) that referred someone for a role then why did you not get it paid to your personal account?

[speling bee]

The question is: who does the money belong to?

Ask the payer, and if it's the Ltd's remember to raise an invoice and include the VAT (or is it different if it's overseas as it may be as it's denominated in USD).

[craig1]

If it's in your company's bank account then it's the company's money unless it was paid there by mistake. The company is not you.

Even if you did have it paid into your personal account then you need to remember that it's income earned and should be treated as such for tax affairs. You're probably going to save money by having your company treat it as its income.

[I just need to test it]

It was simply for referring someone for a role at same ClientCo who was successful in his application.

Why into my company account? Gah, my fault. It was simply the course of least resistance. The payer has been struggling to set up even one payment instruction to LtdCo for services. The prospect of trying to support them through setting up a second to PersAcct just seemed a step too far for both of us.

Accountant response is pending. I asked on here as I presumed maybe others had been recipients of referral payments.

[speling bee]

It was simply for referring someone for a role at same ClientCo who was successful in his application.

Why into my company account? Gah, my fault. It was simply the course of least resistance. The payer has been struggling to set up even one payment instruction to LtdCo for services. The prospect of trying to support them through setting up a second to PersAcct just seemed a step too far for both of us.

Accountant response is pending. I asked on here as I presumed maybe others had been recipients of referral payments.

I think it is in your company's account by mistake and I would put it onto the Director's Loan account, but you really do need your accountant's advice, and if it is yours, ask about personal tax liability.

BTW I received a £50 referral fee from my Ltd's accountant some years ago and they paid it into my personal account - I guess they know what they're doing.