LTD taxes and interest rates?

[NDawg]

Hi all,

Newly LTD contractor looking for a bit of advice on the money in my business bank account. Having paid out X amount in salary/dividends, i understand that what's left is what needs to be paid to HMRC-etc. However, since i'm billed quarterly for (i believe) VAT and yearly for all the other taxes, is it possible to put this money into a higher interest savings account (ISA-etc) and keep it there until I have to pay HMRC?

Or would doing so contravene a business operating code or something similar?

[jmo21]

NorthernLadUk....... I got one, quick!!!!!!!!!!

[mudskipper]

Hi all,

Newly LTD contractor looking for a bit of advice on the money in my business bank account. Having paid out X amount in salary/dividends, i understand that what's left is what needs to be paid to HMRC-etc. However, since i'm billed quarterly for (i believe) VAT and yearly for all the other taxes, is it possible to put this money into a higher interest savings account (ISA-etc) and keep it there until I have to pay HMRC?

Or would doing so contravene a business operating code or something similar?

You can put it in a separate business savings account which may have a higher rate of interest - but you need to keep it separate from your personal money, so ISAs etc are out.

[SimonMac]

Hi all,

Newly LTD contractor looking for a bit of advice on the money in my business bank account. Having paid out X amount in salary/dividends, i understand that what's left is what needs to be paid to HMRC-etc. However, since i'm billed quarterly for (i believe) VAT and yearly for all the other taxes, is it possible to put this money into a higher interest savings account (ISA-etc) and keep it there until I have to pay HMRC?

Or would doing so contravene a business operating code or something similar?

Yes of course you can, although your company will have to pay tax on any interest,

















......unless you were stupidly thinking of putting THE COMPANIES money in your own bank account to accure interest, then thats fraud and you're going to get raped in prison.

HTH BIDI

[northernladuk]

And there are very few alternatives available for investing the company money. Santander do a savings account for business accounts that pays a few percent and am sure some other banks do the same. Nothing else seems to work due to the BIK you have to pay on it and the problems getting it out of the company for a decent length of time. There is also the matter of paying tax on the profits which severely restricts what is worth doing.

You could try searching the forums for anything you can think of as I can bet nearly all of them have been discussed, company loads, BTL in company name, shares, buying gold and so on.

[NDawg]

Hm, given that i'd probably get a higher rate with less hassle on investing the money i pull out as a dividend, i might just skip this as an option altogether.

Thanks for the advice folks.

[northernladuk]

One thing you could do to help which oddly most of the people I spoke to haven't is withdraw your entire years worth of dividends in the first month (from profits only of course) and then invest that somewhere and draw down from that investment rather than trickling the divis out month by month or quarterly or something.

[ThomserveBAS]

I shift all my LTD's tax pot over to ING which when I signed up was offering 2% (think it's dropped now though) which still beats HSBC's 0.01% or whatever it is. I've been contracting since August 2012 and my ING account is returning around £12/month. Peanuts in the grand scheme of things but better than nothing.

Just make sure that wherever you shift the money;

a) is a business-specific account
b) has access terms that align with your HMRC payment schedule and
c) you notify your accountant (if you have one) and send them statements so they know you're not up to something dodgy