Directors Loan and Company Expenses

[Pondlife]

Offset mortgage if you have one. I used to take a £30k dividend on April 7th and whack it in there, and then drew cash against that each month to live off. Simple, no risk solution giving better than the 0.1% interest in the company account. That's where my biggest, no risk savings have come in recent years.

Even sticking it into a decent cash ISA is going to pay more than your business account is going to pay more.

Virgin Money easy access savings account pays 1.5% at the moment, which is more than my company account was paying.

This ^^

[northernladuk]

Hi NLUK
interested in hearing how you make the money work for you? I am aware of 'high' risk ventures which could give a return but you could end up losing. If we assume that most people's divi's are used as living costs on a month by month basis, then a venture is likely to need to be low risk, higher return than leaving in co account and immeditaely accessible (or at least within that year). On that criteria, it would probably rule out bonds, ISAs, shares.

I'm monthly at the moment, but like the idea of taking annually and getting a little more.

I switched to an offset mortgage. I think RBS do a 4% one but not sure if that is for existing savers. Although it is a bit more than a normal one the 32k in for most of the year plus other savings brings the equivalent rate down considerably so well worth it for me. Directors loans also add a nice saving but I leave a good year between using that option so there is no chance of it being called B&B.

Rest is as DD says. Even at 1.5% doing this year on year over your contracting career it will mount up.

[youngguy]

Food for thought. Much appreciated everyone.

[Craig at Nixon Williams]

Remember that when you put your cash into an offset mortgage, you are saving interest that would otherwise be paid on the borrowing rather than earning interest on savings – this is therefore a tax efficient way of making use of your money. You won’t get taxed on money invested in ISAs of course but the amount that you can invest is limited and the return (on cash ISAs at least, is often poor).

Craig