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bigduckontax, Accountant
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I have money sitting in a uk ltd company bank account earning

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I have money sitting in a uk ltd company bank account earning no interest.

Am i free to move this money into a personal savings account - providing it is moved back before the end of my accounting year?

(I want to avoid it being classed as a dividend for tax purposes)
Hello, I'm Keith and happy to help you with your question.

Yes, you can do this. If you are a director then there are tax implications for loans to directors for to do so would create a Director's Loan account in the company's books of account. This has an effect on the company's Corporation Tax position, but is largely mitigated if the loan is repaid before the end of the company's accounting period. Here is HMRC's information on the matter:

'If you pay off your director's loan in full by the last day of your company's Corporation Tax accounting period:

Your company does not pay Corporation Tax on the loan

You don't need to tell HMRC about the loan on your Company Tax Return
For example, your company's accounting period runs from 1 April 2008 to 31 March 2009, and you pay off your director's loan account on 30 March 2009. You don't generally need to include any information about this loan on your Company Tax Return. But from 20 March 2013 you'll need to include it in your Company Tax Return if you either:

Take a further loan within 30 days of (before or after) the repayment

Have arrangements in place for a further loan to be made at the time of the repayment'

See the solution, pay it off just before the end of the company's accounting period. Simple, as the meercat in the TV advert would say!

The interest earned in your personal account in the loan period is of course liable to Income Tax (IT) in your hands and must be declared on your personal self assessment IT return. With interest rates as low as they are at present I wonder if the game is really worth the candle unless substantial sums are involved.

I do hope i have helped you with your problem.
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