Originally posted by tvr450
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Previously on "Money sat in BMM account: how can I make it work harder?"
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I use Saffron at the moment, only 1.5% but better than nothing.
Saffron Building Society | Business e-saver account [Issue 3]
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Originally posted by psychocandy View PostKeeping it simple with regards to sticking it in a savings account in company name so no hassles, any recommendations?
I'm assuming most places wont let you open a savings account in a business name at the normal personal savings rates?
Compare the best Business Savings Accounts in the UK with Moneyfacts best buy comparison
Top 10 Instant Access Business Savings Accounts UK - Best Account Rates Comparison
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Keeping it simple with regards to sticking it in a savings account in company name so no hassles, any recommendations?
I'm assuming most places wont let you open a savings account in a business name at the normal personal savings rates?
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Originally posted by Wanderer View PostAccountants generally discourage directors from taking loans, probably because directors tend to take large loans from the company and spend it all on beer and hookers then find that they are not be able to pay it back. This leaves their company no money to satisfy it's CT and VAT liabilities and HMRC quite understandably not too happy about this situation.
In lieu of a beer and hooker exemption, I'd go the safe route on this one.
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This has been discussed quite a lot here. Lots of people are nervous about the director's loan thing. Personally, I don't take loans from my company.
Originally posted by jamesbrown View PostPUMA is arguing that, were it to be investigated, the justification would be that it's in the best interests of the company. As NLUK mentions, it doesn't appear to have been tested and the underlying principle is highly questionable.
There was a long discussion of this.
I posted a list of options that you can consider.
There was a good discussion on the topic with input from a few accountants that may be interesting. I started a thread about director's loans which has some good information.
To summarise:
1. A directors loan is legal but if it's > £10k then it has to be approved by the directors in a minuted board meeting (a formality for most of us).
2. If it's < £5k and paid back before the end of the tax year then there are no implications.
3. If it's a penny more than £5k at any time during the year then it has to be declared on your P11D, something like a "beneficial loan" or a "loan to participators". You either pay tax on the BIK of the interest free loan OR pay the company interest on the loan (at the HMRC official rate currently 4%) and avoid the BIK charge. The interest becomes company income which you can then pay back to yourself as dividends (minus tax) so you get most of that interest back.
4. If it's still outstanding at the end of the company year then it has to be declared on your company return
5. If it's still outstanding at 9 months after the end of the company year then there is a 25% S455 charge on the value of the loan.
6. You can't go paying the loan off to avoid the S455 charge and then taking it out again the next day ("Bed and breakfasting").
It seems to me that HMRC are primarily concerned with preventing people taking loans as a way of extracting money from the company without paying tax which is why they have the S455 charge.
Accountants generally discourage directors from taking loans, probably because directors tend to take large loans from the company and spend it all on beer and hookers then find that they are not be able to pay it back. This leaves their company no money to satisfy it's CT and VAT liabilities and HMRC quite understandably not too happy about this situation.Last edited by Wanderer; 23 January 2012, 09:02.
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Originally posted by TheFaQQer View PostHow substantial does an argument need to be?
I could leave it in the company account, or I could hold it in trust elsewhere.
I could use a notepad to take notes at meetings, but I use an MP3 player to record the meetings, and then write the notes up on a laptop later.
(I don't actually do either, but the argument that it's not a substantial reason isn't something that I agree with)
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Originally posted by jamesbrown View PostThanks for the link. It's an interesting thread, but the justification here about acting in the best interests of the company doesn't seem like a substantial argument to me, as one can protect the the money through the normal route of (one or more) small business savings accounts that are subject to the FSCS.
I could leave it in the company account, or I could hold it in trust elsewhere.
I could use a notepad to take notes at meetings, but I use an MP3 player to record the meetings, and then write the notes up on a laptop later.
(I don't actually do either, but the argument that it's not a substantial reason isn't something that I agree with)
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Thanks for the link. It's an interesting thread, but the justification here about acting in the best interests of the company doesn't seem like a substantial argument to me, as one can protect the the money through the normal route of (one or more) small business savings accounts that are subject to the FSCS.
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You can hold the company money in trust and then use it but I am sure that involves more than writing a letter to the company. It hasn't been tried and the principle of it is wrong so if it came to a head I can't see you winning.
We have this question many times and despite raft of options from pretty dodgy to completely illegal there doesn't seem to be anything you can do with it.
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Originally posted by TheFaQQer View PostThe Puma has posted about this in the past. Something about you signing a letter to the company which says that you are looking after the money for them, so that they can benefit from the better protection if the bank goes bust.
However, I'd agree with your accountant rather than some random bloke on a forum.
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Originally posted by Rivendell View PostI had wondered about offsetting it against my mortgage somehow to reduce payments?
However, I'd agree with your accountant rather than some random bloke on a forum.
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Originally posted by Rivendell View PostHi folks,
Nearly at end of my first year contracting. I have approx 25k sat in my BMM account (where I hive away cash for Corp Tax and VAT). I haven't paid any corp tax to date and have a rough idea how much I will need. Likewise for my next VAT liability. There should be a decent chunk left over as I've been quite conservative. However, I haven't been very wise (I think) in just letting this money sit there and not earn and real interest. My accountant says I cannot transfer this money anywhere unless it's to a savings account in the Business name. I had wondered about offsetting it against my mortgage somehow to reduce payments?
Any ideas, tips etc...very welcome
Thanks
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Money sat in BMM account: how can I make it work harder?
Hi folks,
Nearly at end of my first year contracting. I have approx 25k sat in my BMM account (where I hive away cash for Corp Tax and VAT). I haven't paid any corp tax to date and have a rough idea how much I will need. Likewise for my next VAT liability. There should be a decent chunk left over as I've been quite conservative. However, I haven't been very wise (I think) in just letting this money sit there and not earn and real interest. My accountant says I cannot transfer this money anywhere unless it's to a savings account in the Business name. I had wondered about offsetting it against my mortgage somehow to reduce payments?
Any ideas, tips etc...very welcome
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