paying p35

[darrenb]

When you're paying the amount on your P35 to HMRC, do you pay it from a personal account or a business account? Does it even matter?

[Sockpuppet]

When you're paying the amount on your P35 to HMRC, do you pay it from a personal account or a business account? Does it even matter?

Is it a business expense?

[escapeUK]

When you're paying the amount on your P35 to HMRC, do you pay it from a personal account or a business account? Does it even matter?

Recently the clientco I was at had the tax man come to visit, as they had paid something late. He had a credit card machine with him, trust me they will take the money in any format from any place. It doesnt matter if its right, only that they get it.

I have another example of this, the same clientco had submitted their end of year paye returns wrongly, and it overstated the tax due by a few thousand. HMRC would not tell us the amounts submitted to compare against the correct version, they would not accept that we had made a mistake, and kept chasing the original amount.

[Clare@InTouch]

You should pay it from the company as it's a company liability. Things are a lot cleaner and easier if you treat yourself and the company as two entirely separate beings - people tend to get in a mess when they treat the company bank account as their own (or vice versa). Using your personal account to pay for company liabilities also gives HMRC an excuse to look into your personal account if they ever investigate the company.

Of course that's not to say the Taxman will care where you pay it from, as long as they get their money!

[darrenb]

Ah ok, thanks. I think I was confusing it with employee taxes.

[darrenb]

I can't believe I still can't pay off my P35!

I need an Account Office Reference Number to pay it. This should be on a booklet they send me. The problem is, I move around a lot, and my accountant is supposed to get my tax mail. But they didn't get it, or lost it, or something.

Any idea how I can get this number? My accountant seems a bit witless on this one.

[Taxless]

Try the employer helpline - HMRC Contact us

They will take you through various security questions and one of these may be the company's Corporation Tax reference, so have it handy.

If your accountant does your PAYE then I think they should be able to handle this for you.

On the payment side, if you pay it from a private account then you are personally meeting a company liability and this would normally be reflected in the company accounts as a directors loan from you to the company.

You are then free to draw that sum out of the company in future, free of tax, when the company has funds.

A small word of caution. If you underwent an HMRC enquiry, you only need to show them company bank accounts unless they establish a problem with the company records, when they may then be entitled to gain accesss to private acounts as well.

HMRC may well argue that if you use a private account to make business payments then the private account has become fair game in any enquiry. There may be nothing to hide in the private account but it just gives HMRC something to trawl through and it isn't always easy to remembr where all of the deposits in a private account came from.

HMRC's starting point, if they can show any weakness in the business records - It is undeclared, taxable, business income, with possible interest and penalty consequences. The onus would then be on you to show that the deposits came from non-business sources.