Where to put surplus company funds to generate interest
Where to put surplus company funds to generate interest
Author
Discussion

dsl2

Original Poster:

1,484 posts

231 months

Tuesday 20th November 2018
quotequote all
Fortunately my company runs with a pretty reasonable six figure cash surplus held mainly in a current account with Lloyds Bank & some times on short term deposits of 30 or 60 days. Both are failing to generate anything worth having on the interest front in the current low interest rate economy.

Wondered if any of the learned folk on here may have a recommendation for a properly secure but higher interest generating alternative at all please?



swatches

88 posts

185 months

Tuesday 20th November 2018
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Virgin Money have 1.01% instant access and 1.6% 1 Year fix Business Savings.

PurpleMoonlight

22,362 posts

187 months

Tuesday 20th November 2018
quotequote all
swatches said:
Virgin Money have 1.01% instant access and 1.6% 1 Year fix Business Savings.
I applied to them and got rejected. Didn't meet their criteria.

ellroy

7,835 posts

255 months

Tuesday 20th November 2018
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Cambridge and counties have a 6 month postal account offering 1.65%

dsl2

Original Poster:

1,484 posts

231 months

Wednesday 21st November 2018
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Thanks for the suggestions there guys, will take a look.

williaa68

1,540 posts

196 months

Wednesday 21st November 2018
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I don't think it necessarily meets your definition of "properly secure" but having first maxed out the £85k with a few banks (Aldermore, C&C etc) I ended up opening a company brokerage account with IG Index and buying corporate bonds through that - eg the Provident Financial 6% 2021 which trade around par. Opening a corporate account is a bit of a pain requiring getting an LEI etc but I figured it was worth it. The tricky part is being disciplined and not being tempted to use the IG account to punt the market more generally...

anonymous-user

84 months

Thursday 22nd November 2018
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williaa68 said:
I don't think it necessarily meets your definition of "properly secure" but having first maxed out the £85k with a few banks (Aldermore, C&C etc) I ended up opening a company brokerage account with IG Index and buying corporate bonds through that - eg the Provident Financial 6% 2021 which trade around par. Opening a corporate account is a bit of a pain requiring getting an LEI etc but I figured it was worth it. The tricky part is being disciplined and not being tempted to use the IG account to punt the market more generally...
I used to have a Ltd business that was cash rich (down to seasonal nature of the industry) and our accountant warned me off using the funds within the business in any type of 'investment" type activity. Can't remember exactly why, but might be worth seeking some advice (if you haven't already).



Ean218

2,044 posts

280 months

Thursday 22nd November 2018
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Inkyfingers said:
I used to have a Ltd business that was cash rich (down to seasonal nature of the industry) and our accountant warned me off using the funds within the business in any type of 'investment" type activity. Can't remember exactly why, but might be worth seeking some advice (if you haven't already).
Yes, if when you sell up or pass the assets on death then the non-trading assets, ie "investment" type activities will cause problems with HMRC.

Interest bearing accounts aren't so problematic, we have cash with Aldermore and Cambridge&Counties.

trowelhead

1,867 posts

151 months

Friday 23rd November 2018
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Had the same "problem" for past few years. Don't really need the money in the business, but don't want to pay massive tax to take personally

This is useful:
https://www.foxymonkey.com/how-to-invest-your-comp...

It's also possible to open up a SPV property company and buy some investment properties using funds from your trading company if you are investing for the longer term

I've concluded that holding plenty of cash is no bad thing and happy to do so for the time being

dsl2

Original Poster:

1,484 posts

231 months

Friday 23rd November 2018
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Yes I'd concur its a nice safety blanket to have especially so in these uncertain times.

No intention of investing it in stocks / shares or buying anything property wise just wanted to have the money wipe its own arse so to speak rather than inflation reducing its value whilst its sat there relaxing!


sideways sid

1,466 posts

245 months

Monday 26th November 2018
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If you don't already own Premium Bonds, borrow from the Ltd Company and buy some.

It is very satisfying to receive a tax-free prize personally when the bond was paid for with untaxed income!

spin

NB IIRC the loan to the company should be repaid within 9 months, so check with your accountant how best to time this.

dsl2

Original Poster:

1,484 posts

231 months

Monday 26th November 2018
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Interesting thought Sid!

Mandat

4,633 posts

268 months

Monday 26th November 2018
quotequote all
sideways sid said:
If you don't already own Premium Bonds, borrow from the Ltd Company and buy some.

It is very satisfying to receive a tax-free prize personally when the bond was paid for with untaxed income!

spin

NB IIRC the loan to the company should be repaid within 9 months, so check with your accountant how best to time this.
I'd be interested to know how HMRC would view this?