Converting Euros to Sterling - Moving currency out of business account

[jamesbrown]

Have you thought about speaking to Cater Allen?

I remember a while ago I changed £70k into euro and negotiated Citibank's margine down to something more reasonable.

The best way to transfer a large sum of money is to use a dedicated currency transfer service, such as Oanda.com, Xe.com, HiFX etc. In general, assuming you trade when the major markets are open and not during a major event risk, there will be a very small spread on the interbank rate, certainly far smaller than the premium charged by a bank (I usually find it's a few pips on USDGBP).

I'm currently working in the US and I do regular currency transfers of moderate amounts into GBP. The only slight downside risk is that you aren't insured if the transfer company collapses mid-transfer. A very small risk, but something to bear in mind for the risk averse. None of this is really worth it for transfer amounts of £1-2k, but you will save £1-2k on a transfer of £70k (assuming a bank premium of 1-3%).

[psychocandy]

Have you thought about speaking to Cater Allen?

I remember a while ago I changed £70k into euro and negotiated Citibank's margine down to something more reasonable.

Usually I'm doing £10-£15K at most. I did speak to them but they wouldnt change for this amount.

[psychocandy]

I thought CaterAllen charged about 1% over the interbank rate for transfers between € and £. I guess CurrencyFair might be slightly better than that but you are getting into diminishing returns here, surely?

In the past it hasnt been worth the hassle. i.e. save £20 or so.

Recently, CA seem to have been much more conservative with their rate.

CurrencyFair rate is very good - you're actually trading with other people so sometimes the rate is even better than the mid-market rate. Gotta be fair been impressed with them so far. Even on £10K, you're saving something like £150 or so on CAs rate. At the moment, with the euro so tulipe I'll take all I can get. :-(

[prozak]

Have you thought about speaking to Cater Allen?

I remember a while ago I changed £70k into euro and negotiated Citibank's margine down to something more reasonable.

[Wanderer]

I've been looking at CurrencyFair which allows you get a much better rate.

I thought CaterAllen charged about 1% over the interbank rate for transfers between € and £. I guess CurrencyFair might be slightly better than that but you are getting into diminishing returns here, surely?

[psychocandy]

What exactly are the rules for deciding what is deemed a Directors Loan?

Obviously, as a business, you're free to move money around as you see fit into savings accounts etc. Is it just a case of making sure that whatever you move into is in companies name and not yours personally?

[psychocandy]

Cater Allen charge EURO 35 for a BACS?

Sheesh. Sounds like you need a new bank.

8E to recieve euro payments in. 35E to send euro payment out.

Free otherwise. And free to transfer from euro to sterling accounts.

[prozak]

Cater Allen charge EURO 35 for a BACS?

Sheesh. Sounds like you need a new bank.

[psychocandy]

You could also look at ukforex. You pay them in € and they pay you in £ or vice versa, rates are pretty good and as long as both accounts belong to your company there is nothing to worry about AFAIK.

Current rate at ukforex is a pantsola 1.1866. Even cater allen is better than that today 1.1827.

The mid rate (which is what you get on Currency Fair was 1.17 earlier today (its 1.1811 now). Same idea - pay in euros, do a matched trade with someone, get sterling back. Only factor with me is it costs 35E to to a BACS from cater allen to them.

Not worth doing today now, since the mid rater has fallen so badly its almost as bad as the cater allen rate (which is updated only once a day - tomorrow it will be worse again). since it doesnt look like getting better time to cut loses and do transfer today I think.

Its a bit annoying because that's £300 less than I would have got a month ago. :-(

Excuse to ask for a rate increase anyway.....

[prozak]

Currently paid in Euros into my Euro business account, and, generally ,when it suits I transfer into linked sterling account. However, at the moment, the Euro is bad anyway but the banks rate seems to have got worse and worse.

So, I've been looking at CurrencyFair which allows you get a much better rate. Plan was to transfer money out of euro business account into currencyfair account, perform the conversion, and then transfer back into sterling account. Bit of hassle but it would save me around £300.....

Only thing I didn't think of, and accountant has mentioned, is whether this transfer out of the business account would be seen by the HMRC as a Directors Loan (and it wouldnt be cool since the amount I'm talking at the moment is £15K Euros).

Obviously, you can move money around into a business savings account if you so desire, so what safeguards do you need in place to make sure any transfer somewhere else is regarded to be a business account rather than a personal account? (Is it just the name of the account holder?)

Although even if HMRC do deem it a loan (over the 5K limit), and it was for 5 days, surely the interest payable wouldnt be much anyway? Or is it hassle to sort out?

Just do it.

I'd like to think that HMRC wouldn't care too much about a transaction like this that is obviously designed to save the company money and the "benefit" amounts to about £8.

[doodab]

You could also look at ukforex. You pay them in € and they pay you in £ or vice versa, rates are pretty good and as long as both accounts belong to your company there is nothing to worry about AFAIK.

[psychocandy]

Surely all that matters is that all accounts involved are in the company's name? In that case I would hope there's no possibility of HMRC claiming that the money was being loaned.

Hmmm. Currency Fair registration does ask you for company name if applicable but I notice that if you log in it just displays personal name.

[borderreiver]

Surely all that matters is that all accounts involved are in the company's name? In that case I would hope there's no possibility of HMRC claiming that the money was being loaned.

[psychocandy]

Currently paid in Euros into my Euro business account, and, generally ,when it suits I transfer into linked sterling account. However, at the moment, the Euro is bad anyway but the banks rate seems to have got worse and worse.

So, I've been looking at CurrencyFair which allows you get a much better rate. Plan was to transfer money out of euro business account into currencyfair account, perform the conversion, and then transfer back into sterling account. Bit of hassle but it would save me around £300.....

Only thing I didn't think of, and accountant has mentioned, is whether this transfer out of the business account would be seen by the HMRC as a Directors Loan (and it wouldnt be cool since the amount I'm talking at the moment is £15K Euros).

Obviously, you can move money around into a business savings account if you so desire, so what safeguards do you need in place to make sure any transfer somewhere else is regarded to be a business account rather than a personal account? (Is it just the name of the account holder?)

Although even if HMRC do deem it a loan (over the 5K limit), and it was for 5 days, surely the interest payable wouldnt be much anyway? Or is it hassle to sort out?