Why would a director have a standing order of 1p to his own company?

Discussion in 'General Business Forum' started by katastroff, Feb 15, 2021.

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Why would a director have a standing order of 1p to his own company?

  1. Dodgy loan

    1 vote(s)
    50.0%
  2. Other reason

    1 vote(s)
    50.0%
  1. katastroff

    katastroff UKBF Newcomer Free Member

    12 0
    Have seen some suspicious bank statements and it has a continuous direct debit to his own company every month for 1 pence.
    He has recently resigned from his company as a director but continues to work at the company.
    The individual has gifted money from the company to family members and does not pay income tax or do the dividends processes correctly either.

    A mess really. But has anyone recalled seeing these minimum repayments to own company such as deferred loans or other reasons for VAT purposes?

    Would appreciate some people's experiences with this.
     
    Posted: Feb 15, 2021 By: katastroff Member since: Feb 15, 2021
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

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    Then report him to HMRC re the income tax. Get the shareholders to deal with him giving money away.

    Are these payment a repayment? It isn't clear from what you have posted.
     
    Posted: Feb 15, 2021 By: Mr D Member since: Feb 12, 2017
    #2
  3. DontAsk

    DontAsk UKBF Ace Free Member

    1,925 306
    It's not uncommon for personal current accounts to require a minimum number of D/Ds to get the best deal
     
    Posted: Feb 15, 2021 By: DontAsk Member since: Jan 7, 2015
    #3
  4. katastroff

    katastroff UKBF Newcomer Free Member

    12 0
    It is not clear whether this is a loan however what is known for certain is that large sums of money have been extracted from the business in the form of “expenses’ but my question. Is

    what benefit is there for vat relief or benefits to show that a loan is being paid to that company?

    the bank statements show 1p transferred to the company bank account from his personal bank. Not money laundering?
     
    Posted: Feb 15, 2021 By: katastroff Member since: Feb 15, 2021
    #4
  5. Scalloway

    Scalloway UKBF Legend Free Member

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    A loan being paid into a company does not attract VAT.

    HMRC and the police will only get interested in money laundering when the sums involved are in the region of £100,000.
     
    Posted: Feb 15, 2021 By: Scalloway Member since: Jun 6, 2010
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

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    Money laundering at the rate of 1p a month? Probably not money laundering.

    What is your interest in this? Shareholder? Director? Accountant?
     
    Posted: Feb 16, 2021 By: Mr D Member since: Feb 12, 2017
    #6
  7. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

    5,750 2,084
    I was wondering too and even confused by the question

    The answer is There is nothing wrong with sending a 1p to the company .

    If you could explain the other misdemeanors a bit more clearly some one would be able to point out where they are going wrong and if you have a reason to report it to HMRC
     
    Posted: Feb 16, 2021 By: JEREMY HAWKE Member since: Mar 4, 2008
    #7
  8. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

    5,667 2,350
    Simple answer, there is absolutely nothing intrinsically wrong with this, and any attempt to guess the reasons would be pure conjecture.

    You clearly have an axe to grind here, but probably need to focus on the specifics of your issue
     
    Posted: Feb 16, 2021 By: Mark T Jones Member since: Nov 4, 2015
    #8
  9. Paul Norman

    Paul Norman UKBF Ace Free Member

    3,248 1,063
    There is nothing in the information given that enables us to really answer the question.

    If you suspect dodgy dealings, there are two courses of action available to you.

    1. Report them to the HMRC
    2. Report them to the shareholders.

    Of course there is a third. Move on. This might not be your fight.
     
    Posted: Feb 16, 2021 By: Paul Norman Member since: Apr 8, 2010
    #9
  10. katastroff

    katastroff UKBF Newcomer Free Member

    12 0
    The director in question is no longer an active director.
    Whilst an active director, large sums were extracted by the director from the company bank account. No tax was paid on this not even a dividend tax. Fuel cards were also routinely used for personal vehicles and no benefit in kind has been paid.

    There is now one year later, a standing order still active from the director's own personal bank account to his bank account.

    Does anyone believe based on this information that a non compliant loan was created by the previous director to lend himself money from the company without authorisation of other board members and now that he is not in the company at all, this question still remains.

    His bank accounts have had to be revealed but they show a direct debit standing order of £0.01 to the company bank account.

    Why would someone even bother making a direct debit for such a nominal amount at all on purpose?
     
    Posted: Feb 16, 2021 By: katastroff Member since: Feb 15, 2021
    #10
  11. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    What any of us believes is completelty irrelevant, particularly on the back of limited 'information' from someone with an axe to grind.
     
    Posted: Feb 16, 2021 By: Mark T Jones Member since: Nov 4, 2015
    #11
  12. simon field

    simon field UKBF Legend Full Member - Verified Business

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    Forget it and move on
     
    Posted: Feb 16, 2021 By: simon field Member since: Feb 4, 2011
    #12
  13. GraemeL

    GraemeL Pain in the neck? Full Member - Verified Business

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    Unless you have access to this persons personal tax records, I dont understand how you can know this for certain?
     
    Posted: Feb 16, 2021 By: GraemeL Member since: Sep 7, 2011
    #13
  14. katastroff

    katastroff UKBF Newcomer Free Member

    12 0
    This is not an option as there is a large decision based on a lot of this
     
    Posted: Feb 16, 2021 By: katastroff Member since: Feb 15, 2021
    #14
  15. katastroff

    katastroff UKBF Newcomer Free Member

    12 0
    We have access to the company bank accounts showing this e.g. sums at a time to family members of £20,000 extracted at a time and large expenses without there being any expenses. We have access to the accounting and payroll. No tax paid.
     
    Posted: Feb 16, 2021 By: katastroff Member since: Feb 15, 2021
    #15
  16. katastroff

    katastroff UKBF Newcomer Free Member

    12 0
    My only question here relates to anybody having ever seen someone make minimal repayments that are minute and where have they seen this before in a general setting. No specific examples are needed
     
    Posted: Feb 16, 2021 By: katastroff Member since: Feb 15, 2021
    #16
  17. simon field

    simon field UKBF Legend Full Member - Verified Business

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    No, they haven’t.
     
    Posted: Feb 16, 2021 By: simon field Member since: Feb 4, 2011
    #17
  18. UKSBD

    UKSBD Not a real duck { Moderator }

    10,618 2,140
    I had a 1p standing order set up for about 12 months and just recorded it as Directors loan.

    Sometimes it's easier to adjust the amounts on standing orders rather than deleting and setting them up again.
     
    Posted: Feb 16, 2021 By: UKSBD Member since: Dec 30, 2005
    #18
  19. MikeJ

    MikeJ UKBF Big Shot Free Member

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    Aha, someone with a sensible answer rather than making stupid posts.
     
    Posted: Feb 16, 2021 By: MikeJ Member since: Jan 15, 2008
    #19
  20. DontAsk

    DontAsk UKBF Ace Free Member

    1,925 306
    So which is it?

    Maybe he forgot about it. A lot of people don't scrutinise their accounts too closely.

    Maybe he wanted to keep the DD or SO active, just in case...
     
    Posted: Feb 16, 2021 By: DontAsk Member since: Jan 7, 2015
    #20