How would you protect >£75k held in your company bank account

[ChimpMaster]

Let's say you have a reasonable sum of company funds held in your business bank account - your lifetime of earnings perhaps - what would you do to protect it from a bank collapse?

Would you open up multiple business accounts at different banks and hold ~£75k in each one? Seems a pain to do that and would cause a heap of work throughout and even more work when you want to eventually close down the company.

I don't really see any other option though.

[blackeye]

Avoid Deutsche Bank would be my only advice.

[jamesbrown]

I don't really see any other option though.

There isn't that I'm aware of. I go with the approach you mention, but it reaches a point where it becomes impractical.

In principle, you could have a deed of trust drawn up to store the money personally in, say, an NS&I income bond account, which is backed by HMT (up to the limit of 1M). However, as I understand it, this carries a significant risk if the deed is not drawn up correctly and, even then, it's likely to expose you to risk of investigation.

Another option, if you're less worried about capital protection, a favourable tax regime on liquidation, or having YourCo designated a CIHC, would be to open a corporate investment account.

I'm not aware of any other options...

[ChimpMaster]

There isn't that I'm aware of. I go with the approach you mention, but it reaches a point where it becomes impractical.

In principle, you could have a deed of trust drawn up to store the money personally in, say, an NS&I income bond account, which is backed by HMT (up to the limit of 1M). However, as I understand it, this carries a significant risk if the deed is not drawn up correctly and, even then, it's likely to expose you to risk of investigation.

Another option, if you're less worried about capital protection, a favourable tax regime on liquidation, or having YourCo designated a CIHC, would be to open a corporate investment account.

I'm not aware of any other options...

Personally I don't believe in holding cash, seeing as how the 2008/9 crisis played out; even if the banks don't go bust, the government could implement a 'haircut' on all banks accounts over a certain limit. So I would want to hold assets instead, preferably property.

So my ideal scenario would be to have the cash out of the company and assets bought with it. Or have assets bought within the company, but that would make it a CIHC I guess, and hence not eligible for MVL later.

I need to review the use of a SPV too, so that the IT Ltd could use it to invest in property. This could be a viable option, but I don't know if the SPV would have to pay the Ltd back if the bank went bust.

[missinggreenfields]

Take the money out and have it my bank accounts rather than the company.

Or spread it around a bit between institutions.

[Scruff]

The £75k protection doesn't apply to Corporate Accounts, IIRC?

[jmo21]

Having multiple bank accounts is impractical??

Oh how the other half live!

[jmo21]

The £75k protection doesn't apply to Corporate Accounts, IIRC?

found this:
Q&As about the UK Deposit Protection Scheme |FSCS

[jamesbrown]

Having multiple bank accounts is impractical??

Oh how the other half live!

If you're paying yourself a modest salary/dividend and have been contracting for 10+ years, it's going to become an issue for many.

In terms of small businesses, they are protected under the FSCS providing:

Turnover: not more than £6.5 million
Balance sheet total: not more than £3.26 million
Total number of employees: not more than 50

[Lewis]

I split across multiple accounts