Investing

[cpjackso]

I want to make an investment this year with my ltd company funds - to secure my income in the longer term and possibly save myself some tax money. ie. Put some money aside for a rainy day.

Can anyone answer this seemingly simple question;

Year 1: Turnover = £32k, Wage1 = £8k, Wage 2=£8k, £16k left over so I Invest £16k, Profit = £0 - so tax payable is £0.
Year X: (bad year - no contract!), Turnover = £0k - so I cash in the investment above and pay my wage bills, Wage 1 = £8k, Wage 2 = £8k... Therefore profit is £0 - so tax is £0?

Is this correct? Can investments be made before a profit calculation is made?

When I say investment - this might be gold or shares etc? (not a bank savings account).

[northernladuk]

Do a search in the forums for gold or investing or other terms. We get a lot of questions about investing company money and so far from what I remember there is nothing clever that is worth doing for what appears to be a number of factors.

Here are the comments about gold particularly

http://forums.contractoruk.com/accou...-gold-etc.html
http://forums.contractoruk.com/accou...-gold-etc.html
http://forums.contractoruk.com/accou...d-via-ltd.html

In fact f' it..Ther are all here..

gold site:forums.contractoruk.com/accounting-legal/ - Google Search

[northernladuk]

Where is the money set aside for tax in your calculations?

I would seriously ask your accountant this question as he will have a better grasp on your situation and give you proper advice.

[Clare@InTouch]

I want to make an investment this year with my ltd company funds - to secure my income in the longer term and possibly save myself some tax money. ie. Put some money aside for a rainy day.

Can anyone answer this seemingly simple question;

Year 1: Turnover = £32k, Wage1 = £8k, Wage 2=£8k, £16k left over so I Invest £16k, Profit = £0 - so tax payable is £0.
Year X: (bad year - no contract!), Turnover = £0k - so I cash in the investment above and pay my wage bills, Wage 1 = £8k, Wage 2 = £8k... Therefore profit is £0 - so tax is £0?

Is this correct? Can investments be made before a profit calculation is made?

When I say investment - this might be gold or shares etc? (not a bank savings account).

No - an investment is not an expense so it will not reduce your profit for tax purposes.

[Nixon Williams]

As has been said, investments by the company would be made from taxed income, ie after the corporation tax has been paid.

Planning for the future is certainly a great idea, but based on your figures I would suggest building up a cash warchest at first and only then consider investments.

Investments are generally medium to long term and you should not invest funds that you are likely to need in 12 months time.

Alan