Moving Company Cash to Personal Accounts

[max]

i know a few comtractors at my place who remove all cash in their company account and place it in high interest accounts, and then make it available again when CT and VAt payments are due. My account told me this is not recommended as its can be counted as a loan from the company.............

i mean how does the tax man know say if i took say £10k out and put in a high int acc for 6mths and back in business account....?

that's silly, not hard to get good business account interest rates. Ok...you might get 1% more in say an Icelandic bank..but not really worth the risk..

[Alfie]

Thanks for the pointers. I have opened an company account with AIB and intend to put some of the retained profits there for a while. Am hoping my accountant says I can take some as a loan and move some into my own personal account too and pay it back before company tax year end. If I can, and lets say I get net interest, wonder how much of that I would have to pay the company since I would have paid tax on it already. Say I made 1K net interest on 20K capital over the next 10 months....how much of that would be reasonable to give the company on repayment of the loan. Service fee is an interesting idea. What is a reasonable service fee for all this hassle .. 1% ?

I'd guess that the extra BIK tax & NI you'll pay on the company loan will outweigh any additional money you'll get on the higher interest rate by using a personal account. Not to mention the bank interest you get will be taxable on you personally....

I think HMRC would disallow any 'service fee' you charge the company for taking a loan - and even if they didn't it would likely be taxable income on you so you need to factor that into the cost/benefit analysis too. The company lending you money is a benefit to you, not the other way round.

[jimbob12]

I notice CaterAllen has its own banking licence but its also guaranteed by Abbey. But ultimately both are part of Santander.
So if I have 50K in Cater Allen, and 50K in Abbey, and Santander goes belly up, am I protected for 100K ?