Reply to: War Chests

[MarillionFan]

6 months to a year. The idea is to cover you if the worst happens. 3 months isn't a long time.

I keepine in the company as I can't pull enough out efficiently to keep it personally.

20 years for me now.

[PurpleGorilla]

Ha ha!

[stek]

Take the money out - and stick in isa.

If you need cash in the account - float it with a directors load.

Simples

Jizz-tastic!

[PurpleGorilla]

Take the money out - and stick in isa.

If you need cash in the account - float it with a directors load.

Simples

[Danglekt]

Did i just grab the bait?

[pr1]

isn't claiming JSA whilst on the bench morally questionable?

At least while there is money in the company to pay the wage and dividends?

[Danglekt]

isn't claiming JSA whilst on the bench morally questionable?

At least while there is money in the company to pay the wage and dividends?

[psychocandy]

Whilst that is true in theory, if you take all of your money out now, then get hit for the tax, say in April you find yourself out of contract. Now you've got no money to pay your salary (not the end of the world) but all that new personal allowance/higher rate tax relief can't be used either.

Contracting allows you to take the tax hit when you need the money, as opposed to whether you need the money or not.

Perfie. You're better off not paying the salary or any dividends and claiming JSA.

[syrio]

Also, what's reasonable amount to save up? I'm aiming for enough to cover me for about 3 months.

I think a minimum of 12 months expenses in cash, perhaps more. 3 months is too optimistic.

Take as much out as possible without paying higher rate tax. Leave the rest in the company so you could take it out in the next tax year if you aren't working. Once you've built your warchest you might want to look at making employer contributions to a SIPP with any excess money.

Keep it in cash in a savings account.

[PerfectStorm]

War Chests

Why do you folks keep so much money in the business? I'd have thought you'd want to take out as much as possible so you can invest it in something useful? You'll get taxed on it presumably anyway when it finally comes out...

Whilst that is true in theory, if you take all of your money out now, then get hit for the tax, say in April you find yourself out of contract. Now you've got no money to pay your salary (not the end of the world) but all that new personal allowance/higher rate tax relief can't be used either.

Contracting allows you to take the tax hit when you need the money, as opposed to whether you need the money or not.

[northernladuk]

Yes but its not ideal to take it all out in one year and pay top dog tax rate is it?

Fair enough you'd be dull not to take it all out up to the 40% bracket but over that the decision needs to be made whether to take the hit or leave it there. For some, its better to leave it in company and feed it out when you need it.

But of course, you can't claim JSA then whereas otherwise you could. {hard hat}

Don't feed the sockie...

[psychocandy]

Why do you folks keep so much money in the business? I'd have thought you'd want to take out as much as possible so you can invest it in something useful? You'll get taxed on it presumably anyway when it finally comes out...

Yes but its not ideal to take it all out in one year and pay top dog tax rate is it?

Fair enough you'd be dull not to take it all out up to the 40% bracket but over that the decision needs to be made whether to take the hit or leave it there. For some, its better to leave it in company and feed it out when you need it.

But of course, you can't claim JSA then whereas otherwise you could. {hard hat}

[stek]

Why do you folks keep so much money in the business? I'd have thought you'd want to take out as much as possible so you can invest it in something useful? You'll get taxed on it presumably anyway when it finally comes out...

Groan.....

[northernladuk]

Why do you folks keep so much money in the business? I'd have thought you'd want to take out as much as possible so you can invest it in something useful? You'll get taxed on it presumably anyway when it finally comes out...

Oh dear.....

[NibblyPig]

Why do you folks keep so much money in the business? I'd have thought you'd want to take out as much as possible so you can invest it in something useful? You'll get taxed on it presumably anyway when it finally comes out...