The salaries are due on Friday. The BV does not have enough cash, but the founder’s sole proprietorship does. He pays the employees from that account and promises himself that the accountant will sort it out later.
That payment may keep people paid. It does not settle the more important question: which business employed them, and which business carried the cost?
The answer follows the working relationship and the business connection of the expense. A bank account can move money. It cannot, by itself, move an employer or a deductible cost.
One owner, separate businesses
A founder may own a BV and also operate a sole proprietorship. Commercially, both can feel like parts of one working life. Legally and fiscally, they are not interchangeable.
KVK explains the distinction clearly. A BV has legal personality and carries its own rights and obligations. A sole proprietorship belongs to the natural person, who is personally responsible for its obligations. Common ownership does not erase that boundary.
This matters when staff, customer work and money begin moving across it.
The employer is not identified by whichever account had enough cash that morning. Belastingdienst guidance looks at the full working relationship, including who determines how, when and where the work is done. Where employment exists, the employer must include the worker in payroll, file the payroll-tax return, and withhold and pay the relevant taxes.
Rijksoverheid also requires the employer to provide core employment information in writing. That includes the employer’s identity, the role, hours, salary and start date. An employment agreement can be oral, but the written information still carries practical weight.
I read these rules as a demand for consistency, not paperwork for its own sake. The contract, daily management, wage slip, payroll return, bank transaction and profit-and-loss account should describe the same business reality.
Cash does not move the obligation
Return to our founder on Friday. Paying the BV’s employees from the sole proprietorship may be understandable. People need their wages, and a small company cannot always wait for a customer to settle an invoice.
Yet that payment needs an explanation in both sets of accounts. It might be temporary funding provided to the BV. It might create a receivable in the sole proprietorship and a payable in the BV. Depending on the wider facts, another documented funding relationship may be appropriate.
What it does not do automatically is move the employment relationship or wage expense.
Without a clear entry, the sole proprietorship appears poorer than it really is. Its cash has fallen, and its result may also be reduced if the payment is posted as its own wage cost. Meanwhile, the BV can appear healthier because a liability or funding need has disappeared from view.
The founder then has two sets of accounts, neither of which shows the full position. Income-tax estimates, corporation-tax work, liquidity planning and annual accounts all start from distorted numbers. A lender or buyer may also struggle to understand which activity carried the staff and which business consumed the cash.
A cost belongs with the enterprise whose business interests created it. That principle matters even when the same person owns both enterprises. A loss in one business does not, by itself, make another business’s wage cost available for deduction.
The payroll chain reaches further
The Belastingdienst reported 836,130 payroll-tax withholding agents in 2025. Those payroll returns do more than collect tax. They also provide individual wage data to UWV, where the information feeds into benefits and public statistics.
For the small employer, this wider chain has a simple meaning. Employer identity is not merely an internal bookkeeping label. It sits inside records used beyond the company.
If the working arrangement later proves different from the payroll position, earlier returns may require correction. Additional payroll tax and tax interest can follow. Even where no major tax difference arises, the correction work can consume expensive time because employment terms, wage records, bank movements and ledger entries must be reconstructed together.
The difficulty usually grows at year-end. By then, the person who made the Friday payment remembers the urgency but not the intended accounting treatment. Staff may have moved between projects. A BV may be preparing to close. Customer contracts may already sit elsewhere.
A monthly question is cheaper than a yearly reconstruction
A sensible review does not begin with tax optimisation. It begins with people.
For each worker, the founder should be able to see which entity is named as employer, which entity directs the work, which payroll reports the wage and which business receives the related customer revenue. Payments from another account should have a visible funding or settlement basis.
This is particularly important after a reorganisation, the transfer of an activity, a period of cash pressure or a plan to close a BV. Belastingdienst guidance recommends reassessing working relationships because practical arrangements can change over time. The same discipline belongs at the boundary between two owner-managed businesses.
Our founder’s Friday payment may therefore be perfectly explainable. Perhaps the sole proprietorship simply funded the BV for three days. If that decision is recorded promptly and reflected on both sides, the accounts can still tell the truth.
The real danger begins when convenience turns into a second version of the company. Payroll says BV. The bank says sole proprietorship. The ledger says whatever produced the preferred year-end result.
Small businesses need flexibility, especially when cash arrives late. But flexibility works best when responsibility remains visible. One owner can move money quickly. The records must still show who employed the people, who owed the wages and which enterprise truly carried the cost.
Need payroll, bank payments, and records for both businesses reviewed? We can help identify the gaps
The data, sourcing, and analysis behind this article were conducted by Paolo Maria Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Paolo Maria Pavan before publication.
