What do you do with your surplus cash?

[dmuk]

Thanks for all the responses.

I don't think Entrepreneurs Relief is a concern. Especially when potential non-trading income will be minimal (1%-2% per annum) and minimal in comparison to current trading income.

https://www.gov.uk/entrepreneurs-relief/eligibility

[MrWebDev]

This makes for interesting reading. TheFaQQer that's some great advice you've given there, I'm definitely going to look into those Business Savings Accounts. In terms of the interest gained from leaving money in those accounts, how, and at what rate is it taxed?

I'm currently teetering on the edge of the higher rate tax bracket. This year and next I have/plan to take £15k out of my biz account to max out my ISA allowance. This is because I have a target amount of money I want to get together in the next year or so which will give me a significant deposit for a house. Do any of you guys have any tips that follow along the lines of what I'm doing, basically taking the cash out?

I'm already putting some money monthly from my Ltd Co. into a pension too.

[PTP]

I'm currently teetering on the edge of the higher rate tax bracket. This year and next I have/plan to take £15k out of my biz account to max out my ISA allowance. This is because I have a target amount of money I want to get together in the next year or so which will give me a significant deposit for a house. Do any of you guys have any tips that follow along the lines of what I'm doing, basically taking the cash out?

Careful that you don't take a nice dividend, buy a house then realise that you're tax bill seems to be double what you thought it would be because of Payments on Account - which tie money up in HMRC's hands a year before they should be allowed it.

[TheFaQQer]

This makes for interesting reading. TheFaQQer that's some great advice you've given there, I'm definitely going to look into those Business Savings Accounts. In terms of the interest gained from leaving money in those accounts, how, and at what rate is it taxed?

It's income to the company, so 20% corporation tax.

[TheCyclingProgrammer]

Careful that you don't take a nice dividend, buy a house then realise that you're tax bill seems to be double what you thought it would be because of Payments on Account - which tie money up in HMRC's hands a year before they should be allowed it.

If the higher rate dividend is a one off, then you can just reduce your payments on account to nothing.

[TheFaQQer]

If the higher rate dividend is a one off, then you can just reduce your payments on account to nothing.

The danger is that if you then need to pay tax next year, you get charged interest for not paying that payment on account

[TheCyclingProgrammer]

The danger is that if you then need to pay tax next year, you get charged interest for not paying that payment on account

True, but if you wait all the way up until the end of January to reduce your payments on account, by that point, you'll be almost 10 months through the tax year the payments on account should relate to so should have a pretty good idea of your plans and whether you can safely reduce them or not.

[d000hg]

Invest it in wine and art, which you store in your home - charging the company a fee for the storage of course.

[css_jay99]

I am currently looking at moving money out of Santander reserve account.

Aldermore is offering with 1.75% 1yr fixed rate.

State bank of india are offering 1.5% instant/easy access as well which seems to be the highest at the moment.

anyone with knowledge of state bank of india account?

cheers

[TheFaQQer]

I am currently looking at moving money out of Santander reserve account.

Aldermore is offering with 1.75% 1yr fixed rate.

State bank of india are offering 1.5% instant/easy access as well which seems to be the highest at the moment.

anyone with knowledge of state bank of india account?

cheers

I looked at SBI but their application process was a bit convoluted so I went elsewhere.

You can get 1.75% on a 95 day account with Cambridge and Counties Bank (Save 95 and 60 - Cambridge & Counties Bank - Small to Medium (SME) Commercial Lending) or 1.8% there on a one year bond.