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Bank Fears

Bank Fears

In order to protect himself from possible bank collapse a client has moved his cash from the company's account to a personal account to take advantage of the financial compensatiion scheme for £50k of savings.
The cash was generated from profits, so I have told him that it will have to be treated as a dividend and there will be tax on it. Unless its a loan I cannot see another way, any other ideas?
Also, can anyone confirm that a small company's bank deposits fall within the FSA compensation scheme?

Many thanks
Stanley

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By Anonymous
19th Oct 2008 15:00

Many thanks
Thanks guys, much appreciated.

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15th Oct 2008 09:33

As David says ....
this has proven quite a popular option with some of my clients too! I suspect with the state of government finance they won't be complaining either.

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By Anonymous
15th Oct 2008 08:22

Early tax payment
A client of mine who has a big tax bill to pay on 31 Jan 2009 has paid the tax early so as to reduce their excess over the £50,000.

They were delighted when I told them HMRC would give them interest on it.

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14th Oct 2008 14:22

Safety First
Deposits from small companies should be covered by the scheme but on the basis of "better safe than sorry" treat this as a loan for the time being.

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By Anonymous
14th Oct 2008 10:44

Try here
http://www.pistonheads.com/GASSING/topic.asp?h=0&t=592807&nmt=Are%20business%20accounts%20covered%20by%20the%2050k%20guarantee?

http://fsahandbook.info/FSA/html/handbook/COMP/4/2

My understanding is all but larger companies (as defined by the Companies Act) get the £50,000 per account.

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