Company Reserves.

[WetBehindTheEars]

Kaiser - are you prepared to recommend your accountant. S/he sounds a lot better than mine. Weekends is above and beyond the call of duty.

[Maslins]

Following completion of my annual corporate accounts, I had a wedge in the business account as well. My accountant has advised me to take this out as a Directors Loan Account payment, as the most tax efficient way.

That's all fine & dandy if you previously had a large director loan (ie the company owed you lots of money). If it didn't, and you end up owing the company lots of money, then as I posted above, Google "S.419 tax", it's not very nice.

@WetBehindTheEars if you're considering changing accountants, feel free to give me a call

[kaiser78]

Kaiser - are you prepared to recommend your accountant. S/he sounds a lot better than mine. Weekends is above and beyond the call of duty.

My accountant is local to me, and is deliberately why I went with them. You should look for a local accountant who offers this kind of flexibillity (not sure how local your current one is) - I always recommend from past experience to stay local and small scale and you will be guaranteed a better and more personal level of service. But just as importantly make sure they know the ins and outs and associated implications of IT contracting. If no joy I can pm you mine's details. HTH

[kaiser78]

Following completion of my annual corporate accounts, I had a wedge in the business account as well. My accountant has advised me to take this out as a Directors Loan Account payment, as the most tax efficient way.

So I have now paid a wedge off the mortgage, topped up equity ISAs and am buying the wife a new conservatory...

Just to clarify I had some funds accounted as Director's Loan Account. The remaining funds were in my company account, which my accountant said I could make use of by withdrawing. Apologies for the clarification, although this is probably still relevant to you.

[SuperZ]

Even taxed that beats the £40 pcm A&L are giving me. And, with a bit of luck,

£40 PCM, you must either have a big wedge or A&L pay a pretty decent rate for a business account.

HSBC are paying me £2.25 a month, on a balance I(my company) was getting £80PCM on back in early 2008. Think the rate is 0.08%. I`ve just paid my Corp Tax five months early as HMRC pay 0.5% on early payments.

Reading this with interest as I`ve been thinking what else I can do with the company funds. I read on this site someting about Offshore Business Bonds but for the life of me I haven`t yet found (via google) any such bonds, unless I misunderstood what type of investment it is. Anyone know?

[Olly]

£40 PCM, you must either have a big wedge or A&L pay a pretty decent rate for a business account.

HSBC are paying me £2.25 a month, on a balance I(my company) was getting £80PCM on back in early 2008. Think the rate is 0.08%. I`ve just paid my Corp Tax five months early as HMRC pay 0.5% on early payments.

Reading this with interest as I`ve been thinking what else I can do with the company funds. I read on this site someting about Offshore Business Bonds but for the life of me I haven`t yet found (via google) any such bonds, unless I misunderstood what type of investment it is. Anyone know?

scottish widows is 2% and piece of piss to open

[THEPUMA]

Hi

In the case of property investment, a neat trick for using company money is to buy the property personally with an offset mortgage then use company money to offset this.

If the correct documentation is drawn up, this should not be treated as a directors' loan and therefore no punitive tax charges will arise.

PUMA

[Andy2]

Hi

In the case of property investment, a neat trick for using company money is to buy the property personally with an offset mortgage then use company money to offset this.

If the correct documentation is drawn up, this should not be treated as a directors' loan and therefore no punitive tax charges will arise.

PUMA

How can you offset it.
offset account will be in your name and company's money will be in company's account.
Which bank allows you to do it

[THEPUMA]

How can you offset it.
offset account will be in your name and company's money will be in company's account.
Which bank allows you to do it

You put it into your personal offset account but put in place a deed of trust clarifying that it remains the company's money.

[Olly]

Hi
If the correct documentation is drawn up, this should not be treated as a directors' loan and therefore no punitive tax charges will arise.
PUMA

Yes but where is the benefit? - HMRC publish interest rates that MUST be paid on any loan over 5K. The interest you pay your company is taxed at corporation tax rates and then you still have the issue about extracting the profit from your Ltd.

Do the sums, it's very simple.
Ah sod it ...I'll do them for you...errrr...can't quickly find current interest rates

Maybe worth a look at this...just about to read it myself

<snip> ok read it - it says if you try to borrow money and avoid the 25% then it will get sticky. What it glaringly doesn't say is that you could pay the 25% (since u get it back) or you could borrow the money for a less dubious time scale.

I can get an offset at 2.79% and the HMRC rate is a fair bit more than that I believe. So it might actually work out costing you money