Company credit cards and savings accounts?

[FreakShow]

As a new contractor, starting to see the money come into the account is great.

A lot of the money is going on getting the home office sorted out with the relevant bits of kit, the accountancy fees, insurance etc. A portion is being invested into a SIPP for me too.

As I have already earnt as PAYE this year, my accountant is suggesting I take just dividends this year, before next financial year I have a salary from the company. I'm holding off on taking the dividends for now so that I try and take them in one go, rather than taking bits and pieces here and there.

This leaves a bit of money just sitting in the company account doing nothing. What are the options in terms of savings accounts for a business? Personally I've been using premium bonds but I assume that is not an option for a business?

On a separate note, this morning I received a pre-approval for a credit card for the business. Normally these get binned when I get them, but is it worth the extra hassle? There's not a huge amount of purchasing the business will do, so I don't need one for cashflow reasons. And I'd rather err on the side of caution with points for personal use. If it's anything like personal credit cards, cashback is hardly worth the effort these days too.

Thanks for any input!

[northernladuk]

First and absolute foremost you need to build up a warchest in the company. This should be enough to keep you going for 6 months comfortably. This is not the time to be living hand to mouth. If you spend it and the contract evaporates you are could be royally screwed. There are many people on here in the same position.

Forget re-investing it for now. Just keep the lump sum growing in the account. Take out only what you absolutely need for now. When you've got 6 months then you can start living the high life.

It might sting for a newbie to see 30k+ (absolute min) of free money (after liabilities) sitting there not doing anything but in a bad period if could be the difference between you seeing it through or topping yourself.

Don't underestimate how important a war chest is.

[ladymuck]

There is no hassle to be had with a company credit card, but there can be perks, and there's two schools of thought:

1. Having a dedicated company card helps you to keep your personal and business expenses entirely separate
2. #1 is overkill and there's no issue with spending on a personal card and submitting an expense claim to YourCo

Both are equally valid and whether you take out a card or not is personal preference.

I am in #1 camp and lots here are in the #2 camp.

[adubya]

Open an instant access business account and put the excess in there. Shawbrook instant access is probably the best you'll do currently.

Business Easy Access Savings Accounts - Shawbrook Bank

[FreakShow]

First and absolute foremost you need to build up a warchest in the company. This should be enough to keep you going for 6 months comfortably.

Thanks. I'm making sure to keep 20% for corp tax aside and a further 20% on top for anything unexpected. As I'm in software/IT, my outgoings are quite minimal from the business so not sure £30k is required, but 6 months of emergency funds is already being saved up personally. But I'll try and put together all the costs I can think of that I could reasonably expect to pay.

I am in #1 camp and lots here are in the #2 camp.

it would be fantastic to gain the points/rewards for the purchases, so it's good to hear #2 is an option. But a friend of mine who has been contracting is very much a proponent of #1 and I think I'd also prefer to err on the side of caution with it. It is a shame as there are some hefty expenses to get setup, hardware, insurance, but better safe than sorry I guess.

Shawbrook instant access

thanks for the tip!