Business Acc Cash over & above the 'slush fund'

[DoctorW]

While I admire your passion for cars & your fine entrepreneurial spirit I have to agree with Northernlad - I'm not into cars enough and they tend to be pretty bad (understatement) financial investments in almost all circumstances!

Buying either as a business or an employee is both a hell of a lot more expensive than keeping my 10 year old 3 grand diesel VW golf. Would rather retire 5 years early and support my younger siblings than have a bunch of (albeit tempting as f***) flash cars over the years.

Also - an index tracker is still risking some capital! but I certainly catch your drift - seeing a fairly useful amount of money languishing with such poor interest should pain any true entrepreneur.... Have not even heard of buying an investment in your own company before, is that really something feasible?

Thanks, D

[TheFaQQer]

Better to pay the corporation tax and get hold of it now, where I can invest it and make it work for me, rather than in 10 years or so when I take it all out in one huge chunk for a property etc.?

Whack it into a pension fund as an employer contribution.

[Maslins]

Whack it into a pension fund as an employer contribution.

That'd probably be my thoughts too, as it doesn't sound like you need the cash now.

That way you can invest it as you see fit (though not currently in residential property), no tax to pay now (in fact extra tax relief now), and whilst you may well have to pay tax further down the line when you withdraw it, most people would expect their other earnings to be much lower at that point.

[TheCyclingProgrammer]

Wow, can't see a single thing about that set up that is worth it. Even at 19k for the car out of pocket isn't even close. And after 3 years it's worth less thank 10k!

Indeed...as jamesbrown said, don't overthink this.

If you need the money now, take the dividends and take the higher rate tax hit.

If you don't, consider investing in a pension (which will reduce CT) or just let the money build up.

You don't necessarily need to wait for ages to MVL, you could probably get away with shutting up shop and going on an extended break - if you've built up significant funds you should be able to do this without any financial worries. Just be aware of the potential (but as yet uncertain and untested) risks of TIS legislation.

[DoctorW]

Roger that, thanks again all.

Thanks also Cyclingprog - had never heard of the TIS legislation. Reading quite an interesting summary of it now.

Take care all

[ItRYmyBEst]

There's always the other option, of buying an investment in your Limited company. This adds a number of complications, however, and is best discussed with your accountant or tax advisor.

I've often thought about it though, given that my warchest is earning a pathetic amount of interest each month and we could achieve >10 times return on the money if the company bought a property and rented it out.

Is it simple to add on a property portfolio ontop of a ltd company? If I done that though, I would have to leave the IT flat rate scheme.

[AnotherGuy]

Is it simple to add on a property portfolio ontop of a ltd company? If I done that though, I would have to leave the IT flat rate scheme.

Wouldn't be better to setup another company to manage the property investments? And maybe have your current LtdCo as parent?