Breach of contract - resolved!

**Kenny@MyAccountantFriend** · 17 August 2015, 22:36

If the contract is in the company name the full amount should be paid to the company and not to your personal bank account.

**TykeMerc** · 17 August 2015, 22:55

Originally posted by Kenny@MyAccountantFriend View Post

If the contract is in the company name the full amount should be paid to the company and not to your personal bank account.

What he said.

That being said if there's any chance they will stop communicating or be awkward I guess you could accept the payments to the two sources then immediately transfer it from personal to business account and record it in your accounts as a client payment error. It's far from ideal, but if it means that the cash is received and ends up in the right account as promptly as possible then no harm done.

I can't see why they would want to do it that way though, makes no sense to me.

**WordIsBond** · 18 August 2015, 07:04

The only justification I can see for this is if the settlement amount is greater than the amount which would have been due for work actually done under the original contract. In that case, the portion greater than the contract could perhaps be treated as personal legal compensation to you.

In that case, their liability insurance may be paying it. It may be that the amount is not taxable for you. As such, it may be to your benefit to have it paid to you personally.

Seems like one to run by your accountant where you can give him all the details of what happened, the amount that would have been paid (and when) if there was no breach, etc.

As suggested, you can clean up any mess if they make the payment this way, so don't risk the settlement, if you think trying to get this changed could do that. Take the money and run, and then make sure it gets to the right account. It would be much harder if they wanted to pay personal money into your company account, rather than the other way around, so don't complain too much, just sort it.

IANAA.

**pr1** · 18 August 2015, 07:33

could be that the person dealing with it from agency can only sign off paying X to one account, if your claim is 1.5X then easier for him/her to split it into two accounts to avoid going higher up his chain - unlikely but possible

**WTFH** · 18 August 2015, 08:02

Originally posted by kesm View Post

Hi all,

I had a breach of contract and finally the agency agreed to pay off the amount that I asked.
However they want to pay half of the amount to my limited company and half of the amount to my personal bank account.

I am not sure why... Would anyone know if I will have any tax implications if I accept that?

Many thanks all.

If they have made that offer, make sure they give it to you in writing. It's just possible that they will pay half into your company, then deny the other half and force you to take them to court.
If all you have is a verbal offer, reject it. Make sure you have it in writing, and from one of their legal team or managers.

Some unscrupulous agencies will claim breach of contract for anything "what do you mean you turned up at the client site? your contract is with us, not the client, you are in breach cause it suits us not to pay you, etc"

It's also worth looking on here to see what others think of that agency.

Breach of contract - resolved!