{"id":328,"date":"2013-03-19T15:00:47","date_gmt":"2013-03-19T15:00:47","guid":{"rendered":"http:\/\/cbavington.com\/blog\/?p=328"},"modified":"2026-09-01T17:40:21","modified_gmt":"2026-09-01T17:40:21","slug":"hmrc-help-themselves","status":"publish","type":"post","link":"https:\/\/www.cbavington.com\/blog\/2013\/03\/19\/hmrc-help-themselves\/","title":{"rendered":"HMRC help themselves"},"content":{"rendered":"

I switched from self-employment to limited company this financial year (see this previous post<\/a>).<\/p>\n

In so doing, I changed banks for business banking<\/a>, switching from the world’s local money launderers to the home of the Libor liars (I’ve got a Co-op Bank application form, honest, I just need the time to switch). However, what I did not do was close my self-employed account with the money launderers. Just in case, basically (e.g. I knew that funds transfers from France worked; there could have been unforeseen hiccups with the new account).<\/p>\n

But I did keep the same VAT number.<\/p>\n

After the VAT returns in Q1 and Q2, HMRC owed me a few quid. I searched both times for the place on their website to add a direct debit instruction for my Ltd Co. account with the Libor liars, to no avail. So HMRC sent me cheques to C Bavington Ltd, and I paid them in.<\/p>\n

For Q3, however, I owed HMRC \u00a3270. Looked around the website again for DD instructions, no joy, so I kicked off an electronic payment from the Ltd Co bank account, a week before the payment deadline. Job done, I thought.<\/p>\n

But no.<\/p>\n

A few days later, HMRC dipped into my old self-employed account and helped themselves to 270 quid. This put the world’s local money launderers into a minor tizz, since I was now overdrawn on an account I hadn’t used for months. Interest was charged.<\/p>\n

Anyway, by shuffling money around like, er, some kind of money launderer, everything is now back in order (and the old self-employed account now closed).<\/p>\n

I should be fair. It took me 2 minutes on the phone to HMRC to explain and for them to offer to send a cheque, which they then did. HSBC waived their standard \u00a325 overdraft charge (but not the interest) and indeed texted me to get me to call them, hence drawing my attention to the problem.<\/p>\n

I do understand how it happened (I think). I suspect it is because I did not cancel the direct debit instruction from my self-employed bank account, and there is a legacy connection between that account and the Ltd Co’s VAT number.<\/p>\n

But I don’t really understand why:<\/p>\n

a) HMRC don’t check the VAT account balance (which would have showed I owed them nothing) before triggering the direct debit;<\/p>\n

b) HMRC can take money from one entity (me, as a self-employed person) owed by another (the Ltd Co.) given the difference in the account names just because the VAT number is the same. I should clarify this is not a VAT number that is “shared” in some way. It has been transferred from one entity to another;<\/p>\n

c) HSBC decided to allow an unused account with no overdraft facility to go overdrawn.<\/p>\n

I would have thought at least one of those factors would have stopped this happening.<\/p>\n

All of which is a long-winded way of saying that, if you do decide to switch from self-employment to limited company and you’re VAT registered, make sure everything is done neatly and don’t rely on either your bank’s or HMRC’s systems to block obvious mistakes. And especially cancel those direct debits!<\/p>\n","protected":false},"excerpt":{"rendered":"

I switched from self-employment to limited company this financial year (see this previous post). In so doing, I changed banks for business banking, switching from the world’s local money launderers to the home of the Libor liars (I’ve got a … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-328","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/posts\/328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/comments?post=328"}],"version-history":[{"count":8,"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/posts\/328\/revisions"}],"predecessor-version":[{"id":427,"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/posts\/328\/revisions\/427"}],"wp:attachment":[{"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/media?parent=328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/categories?post=328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cbavington.com\/blog\/wp-json\/wp\/v2\/tags?post=328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}