Business Savings

[DentonDave]

I have managed to save money in my business, I am now wondering where to invest it as an income to the business. I operate as a ltd company and I don't want to take the money out of the company as an income due to the tax implications. Or am I thinking wrong about this?

 

[Scalloway]

If the company pays you a dividend your first £2,000 will incur no extra tax liability. You can get the company to pay into a pension fund for you. For large sums of money you should consult a financial adviser.

There is more informnation here.

https://nixonwilliams.com/free-resources/limited-company/how-manage-cash-surplus-limited-company

 

[jo.ann]

It all depends on what your business does and how much money it is. Investment in a company brings benefits in the long run. However, if you want to take money, you definitely have a person dealing with finances who will advise you on how to solve this situation.

 

[Ian J]

It all depends on what your business does and how much money it is. Investment in a company brings benefits in the long run. However, if you want to take money, you definitely have a person dealing with finances who will advise you on how to solve this situation.

Wow. That's very insightful of you and I hope that your other posts are equally illuminating

 

[Gettingthereslowly]

This can be a fairly complex area - investing business savings, and does to a large extent depend on how much £ you are talking about.

(I've been mulling the same issue over....and have come to no firm conclusion).

As well as your own income tax to consider; you mention its within a LTD co. At somepoint, you will want to extract the money? There is CGT tax to consider on any gain, and if you are talking about serious amounts of money, in comparison to your normal trading activity (say in years to come), then there are risks that HMRC could refuse you Entrepreneurs Relief (only 10% tax (at the moment!)) on retirement/when you want to extract the funds.

On top of this, some accountants I have spoken to don't like to handle it/haven't much experience of it/don't think its worth the bother.

As previous posters, speak to a INDEPENDENT financial advisor if you have serious money.

I have read that some small business owners have set up a seperate company to hold all their investments within - leaving the day-to-day trading company seperate. There are lots of merit to this approach, but you'll have the expense of a second LTD co. to file accounts for.

If you're just talking about small/modest amounts, there are plenty of business deposit accounts around, all paying a massive 1% interest rate, which can just be held in your existing LTD co.

 

[DentonDave]

Hi ALL

Thanks for the replies . If has given things go think about its only a modest amount compared to what some companies realise but I guess I am fortunate to be in profit in these challenging times.

Regards

Dave