Taking out a business bond account with Santander

[platforminc]

Hi All,

I am thinking of taking out a 1 year business bond with Santander, I think its for 3%. Anything I should be worried about here, I understand its tax free.

I have no immediate plans for the money, its sitting in the bank with literally 0% interest rate.

Thoughts please

[Billy Pilgrim]

Pretty sure you'll be paying corporation tax on the 3% gain

I took a bond out a year or so ago and that was how I believe the accountant put it through the books

[northernladuk]

Why do you think it is tax free? The site says 'Interest will be paid in line with you tax status' so are assuming your situation will make it tax free?

Also meantions AER is gross and it is actually 2.4% net.

Could someone clarrify the tax situation with this?

1 Year Fixed Rate Business Bond: Santander

EDIT : Saying that I can't use it as I am a Santader customer. It mentions payments must come out of a business account outside the Santander group. Bah

[MichaelSJD]

I would agree with northernlad here. If 3% were received into your Limited Company this would then form part of any company profit.

Assuming your profits dictate a 20% corporation tax rate this would leave 2.4% net. This then also assumes personal tax would not further reduce this when it comes to profit withdrawal.

[JoJoGabor]

This is what I do, I put all my CT from the year in December into a 1 year bond. Only worth a few hundred quid a year, but it all helps.

[znuffzz]

what happens if they go pop?