Surplus cash

[aj4u]

Hi All,

Besides doing a pension what do people do with surplus cash in the business.


Thanks Aj

[northernladuk]

Aldermore high interest accounts. Also helps spread the risk if you've over 75k in a single bank.
That said IMO this surplus cash is cash above all tax liabilities and you warchest which should be 3 to 6 month at full rate if you are on the bench depending on your appetite for risk.
Also I'd you've that much in the account you'll be able to divi yourself the full amount upto the tax limit on the first day of the next tax year. Obviously if you do that the war chest doesn't need to be as big as you've already paid yourself.

All that should account for 60k or so. Everything over can be put in a higher interest account.

[TheCyclingProgrammer]

I like to occasionally look at my growing profit reserves and enjoy the warm fuzzy feeling it gives me knowing that should I struggle to find a new gig, I have enough money to keep me going for the next 12-18 months.

[Craig@Clarity]

SPV's and property investment?

[simes]

Or, property investment via your Contracting company and save the £s on a separate set of accounts.

[Craig@Clarity]

Or, property investment via your Contracting company and save the £s on a separate set of accounts.

Could potentially screw up any ER in future though.

[aj4u]

any way to invest in stocks, I've searched the forum and basically can sense its a no no. Thought I'd ask incase some accountant came up with some clever structure to do it

[Lance]

any way to invest in stocks, I've searched the forum and basically can sense its a no no. Thought I'd ask incase some accountant came up with some clever structure to do it

Could potentially screw up any ER in future though.

^^^^^

[Craig@Clarity]

any way to invest in stocks, I've searched the forum and basically can sense its a no no. Thought I'd ask incase some accountant came up with some clever structure to do it

There's nothing stopping you investing in stocks through your company but you'd have to look at how much you're investing and again whether that could affect Entrepreneurs Relief in the future. From experience, most clients in this situation either continue to build on their warchest, invest in property via a SPV, stick it in a company saving's account to earn a bit more interest, pension contributions, dividends up to the £100k mark but never came across one that invested in stocks and shares. If you do that through the limited company you don't get the AEA which you would otherwise if you did it personally.

[simes]

Could potentially screw up any ER in future though.

Fair play.

I must admit I am not thinking that far ahead though. At great risk to my sensibility and those looking to lean in from the cheap seats for an easy mocking, I am considering;

1. ER and how we understand it now may, and indeed probably will, change dramatically to how it is positioned in 10-20 years' time.
2. The disposal of my company may just be left to whomever it is left to.
3. I have two properties in the company, the second one only recently purchased, in some sort of a gamble in light of impending Private Sector IR35 rules. This, if having more than one stream of income to the company than one contract can be covered off via rental income streams.
4. LtdCo BTL is currently the way to go.
5. I didn't want to pay for a second set of accounts.