Business Savings Account
Discussion
At the moment my company has just over £10k in a barclays business saver account (that's not the exact name, but it is the right idea), which is paying 2% interest. By the end of they year we will have roughly £30k in there. The interest rates in this account go up to 2.5% over £25k. It strikes me as being not very good value for money, when I can get 2x or 3x as much interest in a personal saving account. I do not need instant access to the money, although more than 30 days would be a pain, and I will not need more than a few accesses per year. Surely there must be a more efficient way of storing business cash in a low/no risk way?
There are... but they're all out spending the money they've earned in their high-rate business savings accounts!
On a serious note, I bank with HSBC and have a 'higher' interest account for any money that is lying around, but I can't remember what rate it's at... but I'm sure its higher than 2%, though I may be wrong.
On a serious note, I bank with HSBC and have a 'higher' interest account for any money that is lying around, but I can't remember what rate it's at... but I'm sure its higher than 2%, though I may be wrong.
Nothing to add am afraid, just adding this so I can see updates 
Was about to open the same with Barclays as have about that amount sitting in my Business Current Account doing nothing. Hadn't looked at the rates yet but 2% does sound pretty poor so interested to see any options (that won't incur tax).
S.
Was about to open the same with Barclays as have about that amount sitting in my Business Current Account doing nothing. Hadn't looked at the rates yet but 2% does sound pretty poor so interested to see any options (that won't incur tax).
S.
We use a 4 month term deposit account, which is paid gross at about 3.75% from day 1. The rates vary alnmost day by day so the best deal might be a 2, 3 month or 6 month deposit the next day.
We put the corporation tax in there, and any surplus funds, so it is never more than 4 months from being available should it be needed. I guess we will CT on the interest at some point way in the future.
I had thought about the personal savings account but they will deduct tax and it looks and feels messy, and for an extra 1% on 10-25k over a year decided the effort wasn't worth my time to set up and keep shifting the money about. Also likely to trigger the money laundering regs as it is moved into and oput of personal accounts.
We put the corporation tax in there, and any surplus funds, so it is never more than 4 months from being available should it be needed. I guess we will CT on the interest at some point way in the future.
I had thought about the personal savings account but they will deduct tax and it looks and feels messy, and for an extra 1% on 10-25k over a year decided the effort wasn't worth my time to set up and keep shifting the money about. Also likely to trigger the money laundering regs as it is moved into and oput of personal accounts.
If you withdraw a sum of money from your own company on a temporary basis, the company will have made a loan to you. Depending on your overall financial situation with your own company, you may end up with an overdrawn loan account. This is technically illegal under Company Law and could result in the company having to pay an additional Corporation Tax liability on the balance owed to the company by the director at the company's year end date. However, if the loan is repaid in full within nine months of the financial year end (the Corporation Tax payment date), then the additional CT arisng on the loan balance does not need to be paid. If the tax had already been paid and the loan has been subsequently cleared, the Revenue will refund this additional CT back to the company.
All this is covered by Section 419 of the Taxes Management Act.
Whilst the loan is outstanding, there is also a possible Benefit in Kind charge. If the loan has been made interest-free to the director or at a rate below the Bank of England base rate, then the director has received a "cheap" loan and will be taxed under the BIK regulations on the difference bewteen the interest actually charged by the company and the bank base rate. This BIK is based on the period the loan was made available - i.e whether it was cleared before the company's financial year end is irrelevant. Details need to be returned on the P11d showing the length of time the loan was in existence in the relevant tax year and the value of the benefit arising.
Loans under £5,000 can be ignored.
All this is covered by Section 419 of the Taxes Management Act.
Whilst the loan is outstanding, there is also a possible Benefit in Kind charge. If the loan has been made interest-free to the director or at a rate below the Bank of England base rate, then the director has received a "cheap" loan and will be taxed under the BIK regulations on the difference bewteen the interest actually charged by the company and the bank base rate. This BIK is based on the period the loan was made available - i.e whether it was cleared before the company's financial year end is irrelevant. Details need to be returned on the P11d showing the length of time the loan was in existence in the relevant tax year and the value of the benefit arising.
Loans under £5,000 can be ignored.
Edited by Eric Mc on Wednesday 19th July 12:01
Gassing Station | Business | Top of Page | What's New | My Stuff