You’ve checked your business bank account. It looks healthy. You breathe a sigh of relief.
But before you start planning that office upgrade or taking a chunky dividend, stop.

The Dangerous Assumption That Trips Up Business Owners

When you’re an employee, the money hitting your personal bank account has already had tax taken out. What you receive is yours to spend. But if you’re running a limited company, it’s a very different story.

Many new company directors, especially those moving from being self-employed or salaried, make the mistake of treating the business account the same as a personal one. That can lead to problems fast.

Here’s why:

• Your business bank balance doesn’t include upcoming Corporation Tax
• It doesn’t account for your VAT or PAYE obligations
• And your Profit and Loss report won’t show everything either

Even if your P&L looks great, your balance sheet is what tells you what’s actually due, and when.

What’s Really Happening Behind the Scenes?

Let’s break this down. You might see £50,000 in your business account and think, “Brilliant, I’ve got some breathing space.” But in reality:

• £10,000 might be owed in VAT
• £7,000 is due to PAYE and National Insurance
• £8,000 could be on its way to HMRC for Corporation Tax
• And that shiny balance starts looking a bit dull

This is where many businesses fall into the trap: they spend what they see, not what they have.

Why It’s a Cash Flow Problem in Disguise

It’s not just a tax issue, it’s a cash flow issue, and one that can sneak up on you if you don’t understand the numbers.

That’s why we always say:

“A healthy business is one that knows what’s coming in, what’s going out, and what belongs to someone else.”

Building good systems, understanding your balance sheet, and planning for those tax obligations ahead of time are what separates confident business owners from stressed ones.

Get the Business You Want

At Carthy Accountants, we help you make sense of your numbers so you can make better decisions and avoid cash flow disasters. Whether you're newly incorporated or running a growing business, we’ll help you set up the right systems so you always know where you stand.

✅ Want to stop guessing and start planning?
Get in touch today, and get the business you want.