interest (or lack of) on business account

[semisane]

Hi I am a director of a limited company responsible for a block of 16 Flats.

We have a reserve fund for redecoration which rises by approx £17k pa up to £140k after 7 years and then the complex is redecorated - we are currently at £100k

Our managing agent currently has this with Nat West at a little under 2% but after a look on comparison sites over 4% seems easily obtainable.

Are we missing a trick ?

I understand though that we will be taxed on any interest over £500

Any thoughts ?

[ferret50]

If you know when you need the cash, would a fixed rate bond work?

[Badda]

ferret50 said:

If you know when you need the cash, would a fixed rate bond work?

That would be putting achieving interest on leaseholders fund over and above what the funds are for. In an emergency, if the funds were locked away I suspect you’d be in desperate trouble.

[trickywoo]

I don’t think you can get as much as 4% on a straight up business interest account. That will be notice or possibly one with other non-deposit elements.

That said you can get low to mid 3% with no notice. I’m with Shawbrook who aren’t the highest payers but was easy to open and has a decent online platform.

I don’t think you get the £500 ‘allowance’ on business interest, you pay the full corp tax on every penny afaik.

[ferret50]

Badda said:

ferret50 said:

If you know when you need the cash, would a fixed rate bond work?

That would be putting achieving interest on leaseholders fund over and above what the funds are for. In an emergency, if the funds were locked away I suspect you’d be in desperate trouble.

Why?
The funds are earmarked for a specific use.

[scot_aln]

There are various options out there offering fair rates. Take a look at Aldermore for example who give 3.25% on no notice and up to 4.35% on.a fix. You may want to fix some and keep some on non notice.

As a Ltd Co I thought the interest was just business profit for tax purposes.

[wattsm666]

Look at Flagstone

[Raj28]

Did lessee funds not have to be held in a special trust type bank account?