No. Money earned by a limited company belongs to the company, so clients should pay it into the company's business bank account. A limited company is a separate legal person, and its invoices are the company's income even if you are the only director and shareholder.
If a client pays into your personal account, the money is still the company's, and that causes problems:
- It becomes a director's loan. Money you take from the company that is not salary, a dividend or an expense repayment is recorded in your director's loan account. If you spend company money personally, you owe it back.
- A tax charge can follow. If you still owe the company money 9 months and 1 day after its year end, the company pays Corporation Tax on the outstanding amount. The rate is 35.75% for loans made on or after 6 April 2026 and 33.75% for loans made before then. The rate follows the dividend upper rate in force when the loan was made. The company can reclaim the tax once the loan is repaid, but not the interest.
- Larger loans create a benefit in kind. If you are a shareholder and director and owe the company more than £10,000 at any time in the year, the loan is treated as a benefit in kind, with Class 1 National Insurance for the company and a note on your Self Assessment return.
- Your records become incomplete. A company must keep accurate accounting records, so the income has to be recorded and reconciled to a company bank account.
- It can look like hidden income. HMRC, banks and lenders all expect company income to go through company accounts.
If a client has already paid you personally:
- Pay the money into the company account, or record it in the books as a loan from you to the company.
- Take it out later as salary, dividends or a repayment of the loan.
- Ask the client to use the company's bank details on future invoices, with the company name and number shown.
Sole traders are different. You and the business are the same legal person, so being paid into a personal account is allowed. A separate account is still recommended for cleaner records.
Legislation:
