Maximising interest return from company funds.

[Peoplesoft bloke]

I still don`t see why loans wouldn't work. Your second point is about having to pay tax on 3.125 GBP . You presumably mean Individual Tax ? Well individuals pay tax on interest earnings from their normal savings accounts anyway . That we already know. But 3.125 GBP minus 40 % tax leaves you with 1875 GBP. Whereas should the 50K were at a 3.5 % account you will have made 1750 GBP in interest which minus 40 % leaves you with 1050 GBP.

Am I missing something ?

And what do you mean by "official rate" ? Every bank will have its own rate..

Official rate is the rate Hector uses to calculate the value of the benefit - so if yourco didn't charge interest on the loan, Hector says you received a taxable benefit based on the interest you would have had to pay otherwise.

Aside from the fact that it compares two totally unrelated things, your calculation doesn't take into account employers NI.

[thunderlizard]

I usually use HSBC* fixed term business deposit bonds for that sort of thing




*other financial institutions are available

[contractor79]

I usually use HSBC* fixed term business deposit bonds for that sort of thing




*other financial institutions are available

I use that currently as well.