Basic Rate

[simes]

Appointing a family member as a company detector will not …...

Hmmm.

[northernladuk]

Business savings accounts pay about 0.5% less interest (and some extra CT due on interests), drawing money out of the company only to put them in savings account makes zero sense if it will incur higher rate tax.

Plenty that pay more than that with new players popping up all the time on top of the stalwarts like Aldermore.

Best Business Savings Accounts | moneyfacts.co.uk

[sal]

Appointing a family member as a company detector will not allow you to "tap into their personal allowance". You will have to pay them a salary and prove to HMRC they are actually doing meaningful work for the company, or make them shareholders, by selling them a share of your company and pay them dividends.

Both can land you in hot water with HMRC, so thread carefully. The only family member that is sort of an exception is your spouse, for which HMRC are turning a blind eye.

Personally I stick to basic rate tax, as the income covers all my needs. If I needed more money at any point I wouldn't hesitate to go over the threshold and pay the extra tax. I wouldn't let that dictate my lifestyle/spending.

Business savings accounts pay about 0.5% less interest (and some extra CT due on interests), drawing money out of the company only to put them in savings account makes zero sense if it will incur higher rate tax.

[simes]

I always take all the money out. Santander pay a bit of interest up to 20k, and I usually overpay the mortgage with anything over that.

Must admit, I pay off mortgages up to the 40% tax bracket and then leave other payments until the next tax year.

Anything more, and paying 40% tax to save the 4% on the mortgage doesn't make any sense. (Indeed, even drawing down to the 40% bracket is questionable.)

[FIERCE TANK BATTLE]

I always take all the money out. Santander pay a bit of interest up to 20k, and I usually overpay the mortgage with anything over that.

If you don't need the money immediately take it out at the start of the financial year if you're in your situation since you might end up not working for a year and thus save a chunk of change later on.

I don't really see much point in sitting on the money until X years time when you roll up the company, I could be wrong but I don't think the tax relief would be worth it if you have a mortgage, but maybe.

[northernladuk]

Instead of guessing convulted strategies which you have to realise everyone has already done why not speak to your accountant?

Whatever he says, dont let tax levels limit your life. You pay an lot lower tax than most and your earnings put you in the top percentages of earners so skimping over a lower tax level than most isn't really living.

[Craig@Clarity]

WLMS

[ladymuck]

Take what you need to live on, and pay the tax due. If there's any surplus save it for a rainy day and/or put it in a pension/BTL property/Tenerife timeshare.

[GhostofTarbera]

Yes do that


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[ApeShape]

I'm about 18k till I hit that lovely 32.5%. Got me thinking though, do most people hold off on their dividends till the new FY so they can stay on the Basic. Not sure if there's a standard strategy people take when considering such worldly matters. Even considering adding a family member as a Director so I can tap into their personal allowance. Perhaps that's pushing it a bit...Thoughts?

Or perhaps I can just take a 'bonus'...Unless that's taxed too? Sad face, more money into the pension then.