Using another company account

[spunko2010]

Hi all, I'm the director of a UK Ltd Company that has a fairly large turnover at the moment and there is a fairly large balance (over £400k) sitting in the company bank account (a UK bank). A percentage of this will be spent in December when a large corp tax bill is due, but the rest will just be sitting there and I am constantly worried about another 2009 collapse happening with the banks as this balance is below the £85k protection limit...!

I've looked into opening another bank account with another UK bank to spread the risk and transfer some of the funds there, but realised I've actually already got another almost-unused Ltd Company bank account lying around since 2012 that only has a handful of transactions going through it. Would it in theory be okay to transfer some of it there for safekeeping or would this create too many problems with the accounts in future? Obviously I'd transfer it some/all of it back once the bill is paid in December.

I did ask my accountant about all this but they were less than clear and are closed now for the weekend anyway.

 

[Mike Conroy]

quite a few companies have more than one bank a/c this is fine. however, it is best to pay the bills out of the one you use now.

 

[UK Contractor Accountant]

If you stick with one of the High Street banks there is very little risk of losing any money- the Government will step in to rescue the situation if there is another crash as it did with the bail out of Lloyds, RBS & HBOS last time round.

There should be no problems accounting wise shunting some funds around to another Bank.

 

[spunko2010]

quite a few companies have more than one bank a/c this is fine. however, it is best to pay the bills out of the one you use now.

Sure, but in case I wasn't clear they are in different companies (I am sole director of both companies). Is this something that can be done legally, i.e. to store funds from one company account to another for a brief period. I understand it's fine to have 2x separate bank accounts in the SAME company name...

I am wondering if it would be easier/safer to set up a non-UK one.

 

[Mike Conroy]

maybe not such a good idea transfering cash from one company to another company bank a/c

 

[dal]

I think it's a good idea (only my humble opinion). Be careful with the newly chosen banks, as Santander are buying all the Banks, and when I phoned up last year they made it sound like each bank was covered individually.
But when you actually looked into it properly the smaller sister banks were only covered under the bigger bank. So one was not actually getting any additional protection.
They did say this was changing so probably changed now.

 

[spunko2010]

maybe not such a good idea transfering cash from one company to another company bank a/c

Hmm, would be helpful if you could share why you think it's a bad idea. I don't want to schedule another meeting with my accountant if I can help it!

 

[Mike Conroy]

may look like you are dressing the balance sheet.