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5% interest, courtesy of HMRC

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    5% interest, courtesy of HMRC

    Ok so a small number of companies have got better paying company bank accounts.

    But for everyone else, if you pay your Corporation Tax bill early, then HMRC give you interest at the base rate. That's 5%. If you're getting say 3% in your normal account, then on a £20k bill, that's £260 for paying 8 months early. Not huge, but free money at no effort, so why not pay early.....

    Of course the other alternative is to open a Northern Rock business bank account and get 5.48% AER on amounts over £10k all the time.

    #2
    Oo.. interesting.. I get 0% in my account at the moment...

    How do they pay this interest, in a refund? Is that refund then subject to CT? If you pay that early do you get another refund?
    It's about time I changed this sig...

    Comment


      #3
      Originally posted by MrRobin View Post
      Oo.. interesting.. I get 0% in my account at the moment...

      How do they pay this interest, in a refund? Is that refund then subject to CT? If you pay that early do you get another refund?
      They'll send yourco a cheque.. It is subject to CT AFAIK and yes, pay that early and you'll get another interest payment..
      The "Fit" hits the "Shan"

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        #4
        has anyone got an HMRC link for this where it states that they pay interest for coughing-up early ?...

        Comment


          #5
          http://www.hmrc.gov.uk/rates/interest-ctsa.htm

          http://search.hmrc.gov.uk/kbroker/in...on+tax+payment

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            #6
            We paiud our CT about 2 weeks early last year as it was due on 31st December and I was going away over Christmas and new year.


            A couple of months later HMRC sent us a cheque for 30 quid

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              #7
              These rates appear to follow the BoE base rate.

              What happens if I pay now? Is the rate

              a) locked in for the nine month period
              or
              b) calculated at the end of the period based on the rates over time?
              ‎"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."

              Comment


                #8
                Originally posted by Moscow Mule View Post
                These rates appear to follow the BoE base rate.

                What happens if I pay now? Is the rate

                a) locked in for the nine month period
                or
                b) calculated at the end of the period based on the rates over time?
                Yes, I expect it would be one of those. I am pretty sure it is B. I don't think it "tracks" the base rate though.

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                  #9
                  Do they do a similar thing for VAT?

                  QB.

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                    #10
                    I got a small bit of interest credited to my PAYE account after I "overpaid". Actually I didn't overpay at all, it was the first payment of the year and they attributed it to the wrong tax year.

                    I think I only get 4.something% from Barclays, so the 5% for CT sounds good. Though I do like having the extra bank balance, even though I know I can't touch the money.
                    Will work inside IR35. Or for food.

                    Comment

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