What to do with surplus cash in business?

[DigitalUser]

Yes, but you risk not being able to claim entrepreneur's relief when you close the shebang down.

This is what my accountant also stated, although it all depends on the income you're generating from a P2P lending scheme as well i.e. if you're only making a few hundred quid, it's unlikely ER will be affected. I had/have funds in Funding Circle.

[d000hg]

Why do that when you can take the money as a loan and make a killing yourself?

Oh.

Quite.

This is what my accountant also stated, although it all depends on the income you're generating from a P2P lending scheme as well i.e. if you're only making a few hundred quid, it's unlikely ER will be affected. I had/have funds in Funding Circle.

I don't know much about ER but is the situation the income generated this way would be ineligible, or that you risk the entire company becoming so?

[dmo]

What did you end up doing OP?

[Olly]

Yes, but you risk not being able to claim entrepreneur's relief when you close the shebang down.

From what I've read, Entrepreneurs' relief is not available to companies who've made more than 20% of their income through investment income.

Your account is correct, you "risk" it but that's a simplistic answer at best surely?

Let's say you have £100K in your Ltd and your profit is 80K, well if you can get more than a 20% return on your 100K then I'm all ears

Unfortunately this boat has sailed for me as my company is dormant and it grates that its 220K sits at 0.4% interest largely through my own apathy. I may have to do a few days moonlighting to offset even that pitiful interest to qualify for ER, though I'm hoping HMRC aren't so rigid when dealing with a company that's been dormant for 16 months.