What's the point of CT payment references if HMRC ignore them?

What's the point of CT payment references if...

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Just a minor rant.
Because I know what I'm like, I pay my corporation tax on a monthly standing order to HMRC in advance (it's less painful that way). I use the correct payment reference for the correct tax year. This worked fine in 2012. I've just filed my 2013 accounts and put the payments on account on the CT600 showing a small balance to pay. HMRC paper statement comes in showing I owe the whole amount. I check online and its sitting as "unallocated." Even though you can only pay on a certain AP.

So now I need to phone them up and get them to sort it out. Waste of time.

Here endeth the grumpy pregnant lady's rant.

Replies (8)

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By tebthereb
12th Feb 2014 20:40

Just a thought but wouldn't it be just as easy and more lucrative to transfer money every month to a high interest savings account for the company and then pay from this to HMRC annually?

Less risk of something going wrong as less transfers to HMRC, and a bit of interest for the company.

That aside I can of course see why you are annoyed at HMRC!

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
12th Feb 2014 20:56

You show me a high interest business savings account! I don't think they exist.

HMRC pay more interest than my bank :) And then there's no temptation for me to take it out during the year. #honesty

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By DMGbus
13th Feb 2014 13:51

High interest!?!

I recommended that a cash-rich client pay their CT liability several months early.  Result was about £45 interest received from HMRC instead of about £5 from the bank.

This early payment was made in one go and correctly allocated to the correct CT AP, so in my example no issues arose.

I am surprised (and disappointed) that HMRC can apparently mess-up when CT is prepaid by individual instalments.

Based on this occurence I would recommend regularly checking correct allocation of CT payments by HMRC if prepaid by instalments.

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
13th Feb 2014 15:52

I might write them a sniffy letter. It will probably take less time and be more satisfying than calling them.

The payments are all on the HMRC system; I certainly wouldn't want to call up/ write about each one sent to the "unallocated" period - one contact to sort it all at the end is far better!

Like I said, just a rant really :)

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By tebthereb
13th Feb 2014 22:34

I am no financial advisor so to be honest I don't know the interest rates available on corporate accounts -  but I thought the credit rate of interest from HMRC was something like 1% and that there would be better corporate savings accounts available than out there somewhere?

I feared I was saying something so obvious I must be wrong and I guess that was the case!!

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
14th Feb 2014 14:48

Try 0.5% from HMRC and 0.1% from the bank.

1%? You're having a laugh - that's about all you get on a personal cash ISA these days!

 

Edited to add: you might be able to get better rates if you have a large lump sum. I doubt anything sub-£10k or even £20k is going to qualify for anything much from a bank, if it's a business account.

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By DMGbus
14th Feb 2014 15:43

£45 better than £9

Yes, HMRC paid £45 and bank deposit a/c been paying 0.1% which might have been £9.

It is often overlooked that Ltd Co.s cannot get interest rates anything like as good as individuals.

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By tebthereb
14th Feb 2014 21:13

Forgive me for pressing a point where I must be wrong given all the opposing comments; but I googled "corporate savings accounts" and the first link I found was this:

http://moneyfacts.co.uk/business/business-savings-accounts/

Every account shown on there is paying more than 1% isn't it? I haven't looked at the terms.

I appreciate a corporate won't get the same rates as an individual.

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