Savings accounts for Ltd company?

[Karl B.]

I'm fortunate that my company is currently generating a good profit, and after covering all necessary expenses for capital goods, I have surplus funds sitting idle in the account. I want to transfer some of this money into a business savings account. I considered Tide, but they require funds to go through a main Tide account first. I'm not interested in moving my business account away from Starling, as they've always been supportive of my needs, so I don't want to set up another business current account.

How does HMRC view transferring funds to other accounts to earn interest?

 

[Joyous]

How to HMRC see transferring monies into other accounts to make interest?

HMRC have no problem with this provided the bank account in question belongs to the company. Transferring the money to a personal savings account is a no-no as it's not your money.

There are other banks that provide business savings accounts - Allica Bank is one that I see used a lot.

 

[Karl B.]

HMRC have no problem with this provided the bank account in question belongs to the company. Transferring the money to a personal savings account is a no-no as it's not your money.

There are other banks that provide business savings accounts - Allica Bank is one that I see used a lot.

Thanks for that, yes it would be a business only account, will take a look a Allica

 

[Ozzy]

There was another thread that discussed this a little while ago that also had some recommended accounts in it here.

{edit} and also on this there here.

 

[MyAccountantOnline]

I'm fortunate that my company is currently generating a good profit, and after covering all necessary expenses for capital goods, I have surplus funds sitting idle in the account. I want to transfer some of this money into a business savings account. I considered Tide, but they require funds to go through a main Tide account first. I'm not interested in moving my business account away from Starling, as they've always been supportive of my needs, so I don't want to set up another business current account.

How does HMRC view transferring funds to other accounts to earn interest?

No issue with that if it's simply funds transfered from the current account.

Are you aware HMRC pay interest on Corporation tax paid early. The current rate is 4%

 

[Karl B.]

No issue with that if it's simply funds transfered from the current account.

Are you aware HMRC pay interest on Corporation tax paid early. The current rate is 4%

How do HMRC pay interest, I have always done mine early and never received a penny from them

 

[MyAccountantOnline]

How do HMRC pay interest, I have always done mine early and never received a penny from them

It's automatically added to your account. If you have online services you'll see it added.

Is that Corporation tax?

If you dont use online services ask your accountants to log in and check the interest - you may have a surprise!

 

[Rawlinson Pryde]

No issue with that if it's simply funds transfered from the current account.

Are you aware HMRC pay interest on Corporation tax paid early. The current rate is 4%

From 12 August HMRC will be paying pay 4.75% (was 5%) on early Corporation Tax payments.

 

[MyAccountantOnline]

From 12 August HMRC will be paying pay 4.75% (was 5%) on early Corporation Tax payments.

Can you post a link to that please @Rawlinson Pryde - it's not the rates shown on Gov.uk?

I've always known it to be base rate -1% and that agrees to the rates on the Gov.uk site.

 

[NortonBishop]

Can payments be made re Corporation Tax before the company's liability is known?

 

[MyAccountantOnline]

Can payments be made re Corporation Tax before the company's liability is known?

Yes - I do it myself based on monthly estimates of the total due. I generally get a better rate of interest on that than I can in a savings account.

 

[NortonBishop]

Yes - I do it myself based on monthly estimates of the total due. I generally get a better rate of interest on that than I can in a savings account.

Thank you.

And can one use it as a Savings Account - ie pay more than a reasonable estimate to offset CT liabilities for future years?

Can you post a link to that please @Rawlinson Pryde - it's not the rates shown on Gov.uk?

HMRC interest rates for late and early payments

www.gov.uk

(then search for the word, "early" on that page)

 

[MyAccountantOnline]

Thank you.

And can one use it as a Savings Account - ie pay more than a reasonable estimate to offset CT liabilities for future years?


...

I've never actually seen it used to hold significant excess funds so cant answer that, but certainly for reasonable estimates of the annual CT charge I've never seen any issue with it.

Thanks for the link I know HMRC list the rates there. That was what I was refering to when I mentioned the Gov.uk site. I queried the rate quoted by Rawlinson Pryde as it isnt the same as listed there. I wondered where they had got the rate he/she quoted.

 

[NortonBishop]

This is from that link - different date but same percentage.

Interest paid on overpaid quarterly instalment payments and on early payments of Corporation Tax not due by instalments​

From	Percentage %
12 August 2024	4.75

 

[MyAccountantOnline]

This is from that link - different date but same percentage.

Interest paid on overpaid quarterly instalment payments and on early payments of Corporation Tax not due by instalments​

From	Percentage %
12 August 2024	4.75

Quarterly CT payments are something different.

You need to look at the rates for Corporation tax for late payment and repayments. These are currently 7.5% for late paid CT and 4% for Repayments ie CT paid early.

 

[NortonBishop]

Quarterly CT payments are something different.

You need to look at the rates for Corporation tax for late payment and repayments. These are currently 7.5% for late paid CT and 4% for Repayments ie CT paid early.

Oh, it looked to me as those that category which includes the expression "early payments of Corporation Tax not due by instalments" would cover the situation under discussion which is payments of CT being made in advance?

Maybe @Rawlinson Pryde have looked at this more?

 

[NortonBishop]

Do you have an opinion on which the correct interest rates would be @Rawlinson Pryde ?

 

[MyAccountantOnline]

Do you have an opinion on which the correct interest rates would be @Rawlinson Pryde ?

Since posting I've spent time looking at this. I had always understood HMRC pay base rate -1% on CT paid early which corresponds with the repayment rates listed on the links above. However I do think Rawlinson Pryde is correct I think the rates being paid on CT paid early (which is different to CT repayments) is as they have stated and are shown listed further down in the link. I've also checked this against some interest payments my company has received. So the current HMRC interest rate is I believe 4.75%.

 

[Rawlinson Pryde]

Sorry for the delay, yes the link showing the now 4.75% is the correct one having been adjusted lower recently, so even better with it being a higher rate of interest. There are so many options on the link and easy to think repayment would apply as it is also higher up the list, but it is an early payment.

 

[NortonBishop]

Thanks for the clarification.

Any thoughts on how easy it would be to get the money back from HMRC should it turn out that there is no immediate CT liability?

 

[Rawlinson Pryde]

It would not be as easy or as immediate as a bank. It can take weeks to get the money back and even longer if HMRC perform security checks.

We’d only really suggest paying excess money that the company does not need for its day to day activities and also pay up to what you think the liability will be. In reality generally most of the time you should have an idea if there is or isn’t going to be a CT liability by the time you will make a payment.

We use Cynergy for an easy access account that pays 4% but there are higher rate options now. Copy and paste the below:

moneyfactscompare.co.uk/business/business-easy-access-savings/

 

[MyAccountantOnline]

Thanks for the clarification.

Any thoughts on how easy it would be to get the money back from HMRC should it turn out that there is no immediate CT liability?

In my experience HMRC generally refund any overpayments automatically once the Corporation tax return is submitted but if you have to request a refund it can take anything from a few days to many weeks. I've had a few issued almost immediately where I've called and given bank details over the phone and others have taken weeks.