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14-01-2014

Today's Telegraph shows research from accountants Boox suggesting that self-employed workers drew £432m from their business accounts in 2013 to meet personal cash problems.

This risks more tax, though probably rather means HMRC are losing a larger sum than records show.

The accountancy firm found that just under 44% of the UK's 4.2m self-employed people operate separate personal and business bank accounts, but even then many find it difficult to maintain that separation when cash is tight.

Of course it isn't just the self employed who overdraw. Many directors - often advised to incorporate to save tax - are unaware of their duties as directors and their potential personal liability under insolvency legislation. When an IP asks for the money it is often a total surprise to directors who think limited liability is an absolute shield.

More information or even compulsory education of directors would save much pain and loss.

Frances Coulson (fcoulson@moonbeever.com)

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Standout firm known for its personal insolvency work for clients including private companies, individuals and governmental institutions. Frequently acts for insolvency practitioners, assisting with the realisation of assets, both in the UK and abroad.

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