Interest on Bank Accounts

[Maxamus]

Right, heres the plan of action.

Seeing as corp tax isnt due to the tax man for another year or maybe more, im thinking of putting the corp tax that is due every month into a savings account with an interest rate of 5.4 - 5.75%.

Heres the big one, say i made £100 from interest after 3 months or whatever (ball point figure) do i need to import that £100 gained from interest into the business account and subject it to 19% corp tax?

[Bluebird]

it is subject to corp tax...

[Maxamus]

what the foook man

[DaveB]

Interest accrued through the investment of company funds is counted as profit and therefore subject to CT.

[oraclesmith]

A better idea, in my opinion, is to pay your corp tax early. The HMRC pay interest on it. I did and got a cheque from them soon after the due date. Although I haven't figured out exactly what the percentage is, according to a friend of mine who does the same it's much better than you'd get in a business savings/reserve account.

Edit: Just looked it up. It's 5% at the moment.

[Bluebird]

"A better idea, in my opinion, is to pay your corp tax early. The HMRC pay interest on it. I did and got a cheque from them soon after the due date. Although I haven't figured out exactly what the percentage is, according to a friend of mine who does the same it's much better than you'd get in a business savings/reserve account."

Don't forget you have to pay CT on the 5% interest you recieve as well !

[Tool]

A better idea, in my opinion, is to pay your corp tax early. The HMRC pay interest on it. I did and got a cheque from them soon after the due date. Although I haven't figured out exactly what the percentage is, according to a friend of mine who does the same it's much better than you'd get in a business savings/reserve account.

Edit: Just looked it up. It's 5% at the moment.

As far as I know, you can wait up to 9 months after your tax year end to pay CT.
Does the HMRC also pay you interests for this period?

[Bluebird]

it's set @ 0.25% below base rate

[Maxamus]

what if i just spend the money reserved for Corp tax and then just put it back into the buisiness account when its due....?

[Bluebird]

what if i just spend the money reserved for Corp tax and then just put it back into the buisiness account when its due....?

how are you "spending it" ?, don't forget it's the companies money so has to show up on the books - you can spend it but if the expenditure ends up as BIK then you get taxed on it even more and still have to put it back !

You could pay it out as a divi and then repay it later I suppose...