putting aside the money used for income tax

[frustin]

I've been advised that i need to put aside a percentage of any dividends taken for income tax when self-assessment comes along.

I was wondering what people do with theirs? For my own part i was thinking of putting the money in an easy access cash isa.

[northernladuk]

I've been advised that i need to put aside a percentage of any dividends taken for income tax when self-assessment comes along.

I was wondering what people do with theirs? For my own part i was thinking of putting the money in an easy access cash isa.

You have to pay it twice a year as Payment on Account so it's peanuts really. I don't think any strategy is worth it for that amount of money for such a short period. I'd be looking at where best to keep it out of your cash flow and you can get it back quickly to pay it rather than chasing any money to be made investing it.

Payment on Account - what it is and how to pay

Shouldn't you be asking what do you do with the Corp Tax and VAT etc in the business which can amount to 25k+?

[frustin]

Shouldn't you be asking what do you do with the Corp Tax and VAT etc in the business which can amount to 25k+?

yes, that is also a good question.

[northernladuk]

yes, that is also a good question.

Your accountant should do you a tax plan for the year which should indicate how much your tax bill will be and when it's due. That will show you how much you are talking about.

With regards to the company one you could look at a higher interest account like Aldermore for the periods it's unused.

[frustin]

Your accountant should do you a tax plan for the year which should indicate how much your tax bill will be and when it's due. That will show you how much you are talking about.

With regards to the company one you could look at a higher interest account like Aldermore for the periods it's unused.

using Aldermore for sole business bank account or do you mean just for the purposes of moving the corp tax and vat back and forth?

[Hobosapien]

Not everyone that completes self-assessment tax returns has to make payment on account. Using a Ltd means you're not really self-employed in the the eyes of the tax man as you are employed by the Ltd.

[northernladuk]

using Aldermore for sole business bank account or do you mean just for the purposes of moving the corp tax and vat back and forth?

Judging from posts over the years it's a second account that just holds the spare money.