Re: Moving company bank money around...


"Jeremy K." <donot@xxxxxxxx> wrote in message news:f0qojf$o2j$2@xxxxxxxxxxxxxxxxxxxxxxxx

"Peter Saxton" <peter@xxxxxxxxxxxxxxxxx> wrote in message
news:hll133p7ra8sv0g25qror0f1n42n2mngos@xxxxxxxxxx
On Thu, 26 Apr 2007 17:21:21 +0100, Keith <keith@xxxxxxxxxxxxxxxxxx>
wrote:

In message <f0q38t$99a$1@xxxxxxxxxxxxxxxxxxxxx>, Jeremy K.
<donot@xxxxxxxx> writes
Good Afternoon,

Is there anything untoward about moving monies from the company bank
account (which have been set aside to pay VAT and CT bills) into my own
personal offset mortgage account to earn a higher interest? The monies
will of course be transferred back into the company account when the
bills are due. The company is a simple one-man limited setup.

No reason at all, if you don't compromise the company's financial
integrity.

Providing it is clearly identified in your company accounts as a loan
(to you - "Director's Loan Account" in your balance ***)...

... and that you make sure that it is repaid to the company before 5th
April each year. You get taxed on a theoretical interest 'benefit' by
HMRC over a certain figure (used to be 5 grand) if it's outstanding at
tax year end.

See the following
http://edinburghnews.scotsman.com/business.cfm?id=948432006


Thanks to all who replied.

Interesting link that. The loan does look a bit suspect which is why i asked
here. After all it is a benefit in kind and the interest saved ought to be
self assessed as suggested in the piece. But it does seem as long as it's <
£5000 and repaid promptly it should not be a problem.

As suggested, an option is to empty the company bank account early in the
financial year by taking very large dividends and then take smaller
dividends towards the end of financial year in order to have enough to pay
the CT bill. I assume this is not illegal practice :)

Jez.


I think Peter's link to the Scotsman article says it all. If you're planning on taking large divs early each year, keep in mind there must be enough accumulated profits to cover them, and that is profits _after_ CT. I suspect your idea is flawed for this reason.

--
Martin

[Remove barrier to reply]

.