RBS business account linked to Offset Flex personal mortgage?

[northernladuk]

Just spoken to RBS about a new mortgage and bank personally with them. They offered me an Offset Flex mortgage which obviously links to the personal account and uses the value in there to offset the mortgage. It does however also link to a business account and can use that money to offset the mortgage.

There has been a thread on this in the past which seemed to go off on a tangent so not much help and is 2 years old.
http://forums.contractoruk.com/accou...ed-profit.html

The RBS site is still the same however which is odd after such a long time. The details are here..

RBS | Business Offset Service | Help to cut your personal mortgage

Your business
You need to be in business as a sole trader or simple partnership.

Sole trader? The mortgage can be in your name or in joint names between yourself and one other person.

Simple Partnership? All the accounts you include must be in the name of the business partners.

Your business accounts and your mortgage
You can offset the balances in a Business Current Account and up to three Business Instant Access Reserve savings accounts against your personal Offset Flexible Mortgage balance.

Your business and personal accounts remain separate and you manage and spend your money as usual.

You can add or remove accounts from the Business Offset Service at any time.

There have been a lot of threads about offsetting business money against personal mortgages but none of them seemed really viable due to restrictions or excessive interest on the mortgage you have to take but this one seems too good to be true... which is why I am asking.

Is anyone running this setup and aware of any pitfalls that are not apparent from the blurb?

Stop paying interest on Business Account, all 0.5% of it to offset against my 4% personal account without moving a penny. Where is the catch?

TM, if you tell me to search I will find you and open the biggest can of whupass on you you have ever seen!!!

[DaveB]

Just spoken to RBS about a new mortgage and bank personally with them. They offered me an Offset Flex mortgage which obviously links to the personal account and uses the value in there to offset the mortgage. It does however also link to a business account and can use that money to offset the mortgage.

There has been a thread on this in the past which seemed to go off on a tangent so not much help and is 2 years old.
http://forums.contractoruk.com/accou...ed-profit.html

The RBS site is still the same however which is odd after such a long time. The details are here..

RBS | Business Offset Service | Help to cut your personal mortgage



There have been a lot of threads about offsetting business money against personal mortgages but none of them seemed really viable due to restrictions or excessive interest on the mortgage you have to take but this one seems too good to be true... which is why I am asking.

Is anyone running this setup and aware of any pitfalls that are not apparent from the blurb?

Stop paying interest on Business Account, all 0.5% of it to offset against my 4% personal account without moving a penny. Where is the catch?

TM, if you tell me to search I will find you and open the biggest can of whupass on you you have ever seen!!!

As far as I can see the only issue is the BIK incurred as a result of the reduction in mortgage interest you are paying.





PS Have you read the newbie guides and tried the search function?

[northernladuk]

As far as I can see the only issue is the BIK incurred as a result of the reduction in mortgage interest you are paying.

But is that true. No money leaves the business account, it is only linked so the value is taken only. Wouldn't BIK only be incurred if I moved/spent the money to make a profit? For reporting purposes nothing would be any different and they would have to investigate the link between my personal and business account which is done at the personal side so of no real interest to HMIT inspecting my business

PS Have you read the newbie guides and tried the search function?

Looks like TM doesn't need his can of whupass would be happy to donate it to you if you want funny man

[Mr.Whippy]

Think this is only valid for sole traders or simple partnerships. I had a look into this with Clydsedale but not sure it's valid for Ltd Co's.

[Lockhouse]

Think this is only valid for sole traders or simple partnerships. I had a look into this with Clydsedale but not sure it's valid for Ltd Co's.

It isnt. If it was, we'd all be doing it.

[northernladuk]

Think this is only valid for sole traders or simple partnerships. I had a look into this with Clydsedale but not sure it's valid for Ltd Co's.

Dammit. You are quite correct Mr.Whippy. I assumed they had missed us off or something but just asked them this question and they will not take LTD's. Interestingly the guy explained it isn't anything to do with the bank and it's products. They can't offer this type of set up due to problems getting it past HMRC.

Bolshie mentioned something in a thread a few mins ago so just gonna see what his set up is but apart from that it's back to the drawing board I guess.

[eek]

Dammit. You are quite correct Mr.Whippy. I assumed they had missed us off or something but just asked them this question and they will not take LTD's. Interestingly the guy explained it isn't anything to do with the bank and it's products. They can't offer this type of set up due to problems getting it past HMRC.

Bolshie mentioned something in a thread a few mins ago so just gonna see what his set up is but apart from that it's back to the drawing board I guess.

Offset accounts need to all be in with the same name. It may be doable via a deed of trust (the argument is that the offsetting of loans if the bank went belly up is better than the government £85k guarantee) however it needs to be setup 100% right and the HMRC recently won a case on it a couple of months back due to account the money was in (the person doing it did sound like a muppet however).

If RBS allows separate accounts to be used for the offset that would resolve the issue HMRC had with kermit but I wouldn't think its worth the risk.

Back in 2009 though I would have considered due to the risk of bank collapse. Nowadays I doubt its worth the HMRC risk.

[jmo21]

Dammit. You are quite correct Mr.Whippy. I assumed they had missed us off or something but just asked them this question and they will not take LTD's. Interestingly the guy explained it isn't anything to do with the bank and it's products. They can't offer this type of set up due to problems getting it past HMRC.

Bolshie mentioned something in a thread a few mins ago so just gonna see what his set up is but apart from that it's back to the drawing board I guess.

It's even in the RBS quote in your OP

You need to be in business as a sole trader or simple partnership.

[northernladuk]

It's even in the RBS quote in your OP

It did but when I spoke to the guy on the phone when applying for the mortgage I asked about LTD and he went away to speak to someone and confirmed a LTD would be ok so was hoping he was right and the webpage was either worded wrongly or there was something else not on the site they could do. Am waiting for the mortgage guy to ring me back so I can be absolutely certain. It's looking like he made a mistake but worth confirming.

[northernladuk]

Offset accounts need to all be in with the same name. It may be doable via a deed of trust (the argument is that the offsetting of loans if the bank went belly up is better than the government £85k guarantee) however it needs to be setup 100% right and the HMRC recently won a case on it a couple of months back due to account the money was in (the person doing it did sound like a muppet however).

If RBS allows separate accounts to be used for the offset that would resolve the issue HMRC had with kermit but I wouldn't think its worth the risk.

Back in 2009 though I would have considered due to the risk of bank collapse. Nowadays I doubt its worth the HMRC risk.

Yeah I saw that and remember it was a dodgy setup from start to finish and looked like a total scam to me and I don't know the legalities around it. Am not really bothered about trying this route, too risky for me personally.