How do you manage your Ltd Co Surplus cash?

[JamJarST]

I'm talking about taking out of the company and putting it in the offset mortgage, if you follow the thread properly.

Is that what the OP meant by surplus cash in the company? If you draw all the money, you pay all the tax on it and it ceases to be surplus cash/warchest, or am I missing the point?

[northernladuk]

Is that what the OP meant by surplus cash in the company? If you draw all the money, you pay all the tax on it and it ceases to be surplus cash/warchest, or am I missing the point?

That was my take on it but it is a valid point being made. One option you have is to pull it out and invest it in a way that may outweigh the tax or just suck it in and use it.

We always talk about that dreaded threshold, which to be fair just means we will pay what is good and legal like everyone else does. It isn't an absolute limit

[decentguy]

I have opened a business savings account with santander and gives me safe 1.8% interest rate. I know its not high but at least its better than 0.1% offered by business current account

Best thing about this account is that money can be transferred anytime in case you need it for a rainy day

[JamJarST]

I have opened a business savings account with santander and gives me safe 1.8% interest rate. I know its not high but at least its better than 0.1% offered by business current account

Best thing about this account is that money can be transferred anytime in case you need it for a rainy day

If it is like my Santander savings account you get a debit card too so you can pay dierctly from the savings account. I transfer my VAT and tax money into mine and pay directly from it to HMRC.

[eek]

That was my take on it but it is a valid point being made. One option you have is to pull it out and invest it in a way that may outweigh the tax or just suck it in and use it.

We always talk about that dreaded threshold, which to be fair just means we will pay what is good and legal like everyone else does. It isn't an absolute limit

My take based on the last time I paid attention to it is that you would have to be either single or very well paid not to be able to withdraw most of your company's income every year without paying much more than your corporate income tax.

I calculated that between me and my wife I can withdraw £50,000 in dividends at the lower rate tax band (based on what she is paid elsewhere) and pay myself £7,000.

Those two options alone before you look at pension payments or even expenses else cover a turnover of £67,000 or £300 a day.

Granted you may not be able to use much of your wife's tax allowance but I would prefer to have my warchest in my own account rather than my companies account.

[JamJarST]

My take based on the last time I paid attention to it is that you would have to be either single or very well paid not to be able to withdraw most of your company's income every year without paying much more than your corporate income tax.

I calculated that between me and my wife I can withdraw £50,000 in dividends at the lower rate tax band (based on what she is paid elsewhere) and pay myself £7,000.

Those two options alone before you look at pension payments or even expenses else cover a turnover of £67,000 or £300 a day.

Granted you may not be able to use much of your wife's tax allowance but I would prefer to have my warchest in my own account rather than my companies account.

I am single so buggered there, but of course it has its advantages too

As to your last point. If you leave a warchest in your compnay though, you can use it when you need it and it is more tax efficient.

[jmo21]

I have opened a business savings account with santander and gives me safe 1.8% interest rate. I know its not high but at least its better than 0.1% offered by business current account

Best thing about this account is that money can be transferred anytime in case you need it for a rainy day

Which specific account is this? I can only see the Business Reward saver at 1.8 which only allows one withdrawal per year. Maybe this wasn't the case when you opened the account?
Santander PDF

[eek]

I am single so buggered there, but of course it has its advantages too

As to your last point. If you leave a warchest in your compnay though, you can use it when you need it and it is more tax efficient.

The only things that make it tax efficient is based on personal tax laws.

Keeping your warchest in the company doesn't make sense for me until you reach the point when you cannot remove any more cash from your company in an tax efficient way.

After that it really depends on how many savings you have elsewhere so personally I think keeping a warchest in the company is pointless.

Surely it is better to avoid paying any corporation tax on the surplus cash by putting it directly into your pension pot instead.

[decentguy]

Which specific account is this? I can only see the Business Reward saver at 1.8 which only allows one withdrawal per year. Maybe this wasn't the case when you opened the account?
Santander PDF

Definetely seems that terms and conditions have changed. When I opened it, month in which you make withdrawal, you get lower interest rate. From what I see now, you can only make 1 withdrawal iin first 12 months which sucks.

[swebb]

I'd also be interested to know about any deposit business accounts any one has. I'm currently with Cater Allen which are very good but the rate they pay isn't great. I'm also concerned about the 50K gov guarantee on accounts (actually does this apply to businesses!!!). So I'd like to take a lump of the cash in the business and put it in a deposit account for say 6 months or so.

I've checked with Cater Allen and they do deposit account that can be anywhere from 1 week to 24 months which can be set up to be rolling. The money is locked away for the deposit period (no access). So it can be set up to be rolling for say 1 month so you can always get at the money after 30 days max. You need a minimum of 50K though. Current rates on 50k are:

1 month 0.65%
2 month 0.73%
3 month 0.96%
....
12 month 2.65%

Any idea's ?