Personal payments on your bank statement might be seen as ways to avoid tax, says TC Denton as he grants licence
Traffic Commissioner (TC) Nick Denton has emphasised that sole traders and sole directors of limited companies needed to keep business and personal bank transactions separate.
The TC’s comments came when he granted a new two-vehicle national licence to Minibuses 4U, of Russell Terrace, Leamington Spa, at a Birmingham Public Inquiry.
The TC said that company bank statements produced showed a large number of personal transactions relating to sole Director and Transport Manager Harmonder Satsavia, for example for cinema tickets and flights. Such transactions could be a way of making payments without tax.
Mr Satsavia said that his late father had previously kept the book. His accountant had made it perfectly clear that he could not do that, and the money had been paid back into the company’s account, treating it as a director’s loan.
Going forward there would be no personal transactions, with the business and personal accounts being kept completely separate. He had had a massive telling off from his accountant at the end of the financial year.
In reply to the TC, he said that he already operated small private hire vehicles and minibuses with up to eight passenger seats. He only undertook special needs contracts. His late father had had a restricted licence which had terminated.
He wanted to operate 16-seaters, and on a contract his father had held the local authority was allowing him to use two small vehicles until the company got a national licence. He had recently attended a two-day PSV O-Licensing course.
Asked about the parking arrangements, Mr Satsavia said that he had reduced the application from four vehicles to two 16-seaters. He had originally wanted 25-seaters but the yard at the building the company owned was only suitable for parking 16-seaters. He had looked elsewhere but it was difficult to get land.
The vehicles were still in his father’s name, as they had not yet been signed over by the accountant who was the executor of his father’s will.
Granting the application with a condition that vehicles with more than 16 passenger seats could not be used, the TC said that he was satisfied about the operating centre and the undertaking that by the end of September financial evidence would be provided for the first three months of operation.
He warned that he would look closely at that evidence to see that the personal and business transactions had been separated.
