Originally posted by Sockpuppet
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Reply to: Interest on company assets
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Previously on "Interest on company assets"
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Exactly.
Remember also that Interest forms part of you Profit / Turnover so you have to pay corp tax on it.
But your accountant will tell you that.
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They are all coming out of the woodwork today.
Basically, no you can't.
Your company is a separate legal entity from yourself personally and you cannot switch money between the two whenever you want, it has to be on the basis of a recognised "event". This is basic stuff.
What you can do, is open a higher interest account in yourCo's name and keep the money there until it is needed.
There are subtler things that you could potentially do like overdraw the Director's Loan Account to put money against the offset mortgage until it has to be paid back, but do not attempt that without taking the advice of an accountant to ensure that this does not fall foul of the rules, and some will recommend that you don't do it at all.Last edited by Gonzo; 19 March 2008, 19:18.
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Interest on company assets
First some background
My contract is paid weekly but I run my salary each month.
I’m flat rate vat registered so charge 17.5% but only pay HMRC 13%(12% for the first year).
I work out my debits each month (vat, corp tax, employer NI and always err on the side of caution) and keep a running total of what is in the business bank account and what’s due to come out.
I pay vat each quarter and corp tax annually (obviously ?).
Finally my question.
As the months and years progress I accrue a fair amount of money ear marked for VAT, employer NI and corporation tax in my business bank account. Am I allowed to move this money out of the business account into an account that gives me a better interest rate. I’d still be able to meet the company commitments as far as VAT and tax are concerned when required but I’d be earning a better return than the business account.
A further question would be what type of account could I move it to (simple saving or ISA and who should the account be registered to, me or the company) and who owns the interest me or the company ( I suspect this depends on whose name the account is opened in).
I suppose the goal would be to move this money somewhere where it could offset my mortgage but I think I’ve read somewhere that that might be a step too far.Tags: None
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