Pay off mortgage with dividends???
Discussion
red_slr said:
IMHO, you need a reality check.
You need to sit down with someone who can provide this.
Otherwise you are going to end up in a world of hurt in a few years if you are currently trying to figure out how to pay off a £120k mortgage and pay a few tens of k tax bla. Seriously you need to do this asap.
Businesses grow, businesses fail, there is a life cycle. You are refusing to accept this or plan for it. You need a 5 year plan, and I am talking tax here.
You say you don’t have aspirations to become a millionaire, well you best accept it because most likely you will become one in the next few years. Just because of poor planning accessing the cash may become problematic if you are tax averse. I am not saying you will be daft with money in terms of spending it, but you are being very silly refusing to accept where you are now and need to look at what presents good value and what is best use of your time for the future.
Plodding along in a 60k PAYE job with a business in the background which has potential profits of £350k PA is just madness. All because you want to appear to be "not bothered and we don't need the money" etc etc. But in the meantime you are worried about £20,30k tax bill.
Reality check time....
Thanks for the comments. In reality there is obviously much more to it than this. I don't expect you to understand but I'm not willing to put the reasons on an internet forum. Appreciate that it looks rather odd based on the info I've provided. You need to sit down with someone who can provide this.
Otherwise you are going to end up in a world of hurt in a few years if you are currently trying to figure out how to pay off a £120k mortgage and pay a few tens of k tax bla. Seriously you need to do this asap.
Businesses grow, businesses fail, there is a life cycle. You are refusing to accept this or plan for it. You need a 5 year plan, and I am talking tax here.
You say you don’t have aspirations to become a millionaire, well you best accept it because most likely you will become one in the next few years. Just because of poor planning accessing the cash may become problematic if you are tax averse. I am not saying you will be daft with money in terms of spending it, but you are being very silly refusing to accept where you are now and need to look at what presents good value and what is best use of your time for the future.
Plodding along in a 60k PAYE job with a business in the background which has potential profits of £350k PA is just madness. All because you want to appear to be "not bothered and we don't need the money" etc etc. But in the meantime you are worried about £20,30k tax bill.
Reality check time....
Deesee said:
Just flicked through the thread...
Ltd co..
Cash on deposit in the business... what's your working capital cycle and cash requirement, say its 20/30k, then you have a surplus, withdraw it, the business does not need it.
Do you take advantage of making pension contributions from the company and reducing your corp tax bill? Could this be paid into a personal pension or a sipp/sass?
Do you take advantage of employee/shareholder benefits, ie life insurances, private medical, dental care as a business expense, rather than paying them after you've paid corp tax/PAYE/DIV tax?
Personal
Are you (and your partner) utilising the ISA allowances (you would have 40k between you) and potentially the lifetime isa allowance of 4k each? You could grow a sizeable investment portfolio CGT and income/Div tax free here.
Personal pensions see above are you BOTH getting up to the annual allowance limit?
Have you set up a Junior ISA for the new arrival?
PAYE
Does the company/s you both work offer a salary sacrifice, or a matched pension contribution scheme, potentially could you lower your PAYE tax payable and also your NI, and get more cash into the wrapper.
Is it worth looking at taking a sabbatical to concentrate on the side business, to see what could be achieved with 6 months of total commitment in terms of time?
BTL
From your numbers provided, you have an (hopefully) appreciating asset, with debt being repaid, assuming the property in a decent state of repair and you have a reliable tenant why worry?
Good luck OP!
Thanks for the comments. Most of them I've already considered. Those Ive not I will look into.Ltd co..
Cash on deposit in the business... what's your working capital cycle and cash requirement, say its 20/30k, then you have a surplus, withdraw it, the business does not need it.
Do you take advantage of making pension contributions from the company and reducing your corp tax bill? Could this be paid into a personal pension or a sipp/sass?
Do you take advantage of employee/shareholder benefits, ie life insurances, private medical, dental care as a business expense, rather than paying them after you've paid corp tax/PAYE/DIV tax?
Personal
Are you (and your partner) utilising the ISA allowances (you would have 40k between you) and potentially the lifetime isa allowance of 4k each? You could grow a sizeable investment portfolio CGT and income/Div tax free here.
Personal pensions see above are you BOTH getting up to the annual allowance limit?
Have you set up a Junior ISA for the new arrival?
PAYE
Does the company/s you both work offer a salary sacrifice, or a matched pension contribution scheme, potentially could you lower your PAYE tax payable and also your NI, and get more cash into the wrapper.
Is it worth looking at taking a sabbatical to concentrate on the side business, to see what could be achieved with 6 months of total commitment in terms of time?
BTL
From your numbers provided, you have an (hopefully) appreciating asset, with debt being repaid, assuming the property in a decent state of repair and you have a reliable tenant why worry?
Good luck OP!
Edited by Deesee on Sunday 20th January 23:49
JapanRed said:
Deesee said:
Just flicked through the thread...
Ltd co..
Cash on deposit in the business... what's your working capital cycle and cash requirement, say its 20/30k, then you have a surplus, withdraw it, the business does not need it.
Do you take advantage of making pension contributions from the company and reducing your corp tax bill? Could this be paid into a personal pension or a sipp/sass?
Do you take advantage of employee/shareholder benefits, ie life insurances, private medical, dental care as a business expense, rather than paying them after you've paid corp tax/PAYE/DIV tax?
Personal
Are you (and your partner) utilising the ISA allowances (you would have 40k between you) and potentially the lifetime isa allowance of 4k each? You could grow a sizeable investment portfolio CGT and income/Div tax free here.
Personal pensions see above are you BOTH getting up to the annual allowance limit?
Have you set up a Junior ISA for the new arrival?
PAYE
Does the company/s you both work offer a salary sacrifice, or a matched pension contribution scheme, potentially could you lower your PAYE tax payable and also your NI, and get more cash into the wrapper.
Is it worth looking at taking a sabbatical to concentrate on the side business, to see what could be achieved with 6 months of total commitment in terms of time?
BTL
From your numbers provided, you have an (hopefully) appreciating asset, with debt being repaid, assuming the property in a decent state of repair and you have a reliable tenant why worry?
Good luck OP!
Thanks for the comments. Most of them I've already considered. Those Ive not I will look into.Ltd co..
Cash on deposit in the business... what's your working capital cycle and cash requirement, say its 20/30k, then you have a surplus, withdraw it, the business does not need it.
Do you take advantage of making pension contributions from the company and reducing your corp tax bill? Could this be paid into a personal pension or a sipp/sass?
Do you take advantage of employee/shareholder benefits, ie life insurances, private medical, dental care as a business expense, rather than paying them after you've paid corp tax/PAYE/DIV tax?
Personal
Are you (and your partner) utilising the ISA allowances (you would have 40k between you) and potentially the lifetime isa allowance of 4k each? You could grow a sizeable investment portfolio CGT and income/Div tax free here.
Personal pensions see above are you BOTH getting up to the annual allowance limit?
Have you set up a Junior ISA for the new arrival?
PAYE
Does the company/s you both work offer a salary sacrifice, or a matched pension contribution scheme, potentially could you lower your PAYE tax payable and also your NI, and get more cash into the wrapper.
Is it worth looking at taking a sabbatical to concentrate on the side business, to see what could be achieved with 6 months of total commitment in terms of time?
BTL
From your numbers provided, you have an (hopefully) appreciating asset, with debt being repaid, assuming the property in a decent state of repair and you have a reliable tenant why worry?
Good luck OP!
Edited by Deesee on Sunday 20th January 23:49
Might be worth looking at getting some outside advice (professional) perhaps finding a accountancy/advisory/coaching firm that might specialise in what you do, or one that can help with managing the growth and keeping the focus, lifecycles (mentioned above) of business can be finite, sometimes opportunities really do need to be capitalised on, and you might find you're a natural entrepreneur, with the ability to manage several businesses as profitable as this at the same time.
For me family and work/life balance is everything, I left a very nicely paid role 4 years ago when my first was born and set up in business, for me work/life balance and time with the family is my driver, although bills need to be paid!
As before good luck!
Deesee said:
JapanRed said:
Deesee said:
Just flicked through the thread...
Ltd co..
Cash on deposit in the business... what's your working capital cycle and cash requirement, say its 20/30k, then you have a surplus, withdraw it, the business does not need it.
Do you take advantage of making pension contributions from the company and reducing your corp tax bill? Could this be paid into a personal pension or a sipp/sass?
Do you take advantage of employee/shareholder benefits, ie life insurances, private medical, dental care as a business expense, rather than paying them after you've paid corp tax/PAYE/DIV tax?
Personal
Are you (and your partner) utilising the ISA allowances (you would have 40k between you) and potentially the lifetime isa allowance of 4k each? You could grow a sizeable investment portfolio CGT and income/Div tax free here.
Personal pensions see above are you BOTH getting up to the annual allowance limit?
Have you set up a Junior ISA for the new arrival?
PAYE
Does the company/s you both work offer a salary sacrifice, or a matched pension contribution scheme, potentially could you lower your PAYE tax payable and also your NI, and get more cash into the wrapper.
Is it worth looking at taking a sabbatical to concentrate on the side business, to see what could be achieved with 6 months of total commitment in terms of time?
BTL
From your numbers provided, you have an (hopefully) appreciating asset, with debt being repaid, assuming the property in a decent state of repair and you have a reliable tenant why worry?
Good luck OP!
Thanks for the comments. Most of them I've already considered. Those Ive not I will look into.Ltd co..
Cash on deposit in the business... what's your working capital cycle and cash requirement, say its 20/30k, then you have a surplus, withdraw it, the business does not need it.
Do you take advantage of making pension contributions from the company and reducing your corp tax bill? Could this be paid into a personal pension or a sipp/sass?
Do you take advantage of employee/shareholder benefits, ie life insurances, private medical, dental care as a business expense, rather than paying them after you've paid corp tax/PAYE/DIV tax?
Personal
Are you (and your partner) utilising the ISA allowances (you would have 40k between you) and potentially the lifetime isa allowance of 4k each? You could grow a sizeable investment portfolio CGT and income/Div tax free here.
Personal pensions see above are you BOTH getting up to the annual allowance limit?
Have you set up a Junior ISA for the new arrival?
PAYE
Does the company/s you both work offer a salary sacrifice, or a matched pension contribution scheme, potentially could you lower your PAYE tax payable and also your NI, and get more cash into the wrapper.
Is it worth looking at taking a sabbatical to concentrate on the side business, to see what could be achieved with 6 months of total commitment in terms of time?
BTL
From your numbers provided, you have an (hopefully) appreciating asset, with debt being repaid, assuming the property in a decent state of repair and you have a reliable tenant why worry?
Good luck OP!
Edited by Deesee on Sunday 20th January 23:49
Might be worth looking at getting some outside advice (professional) perhaps finding a accountancy/advisory/coaching firm that might specialise in what you do, or one that can help with managing the growth and keeping the focus, lifecycles (mentioned above) of business can be finite, sometimes opportunities really do need to be capitalised on, and you might find you're a natural entrepreneur, with the ability to manage several businesses as profitable as this at the same time.
For me family and work/life balance is everything, I left a very nicely paid role 4 years ago when my first was born and set up in business, for me work/life balance and time with the family is my driver, although bills need to be paid!
As before good luck!
Agree on the work life balance. Last year was a big year for me; first born child arrived, 3 serious illnesses in my immediate family (brother sister mother) - breast cancer diagnosis as terminal, mental health issues and a brain tumour to cap it all off - 2 of these individuals are in their 20’s
Appreciate what folk are saying as it’s a finance forum but there’s more to life than money. We’ve sold the M3, bought an X5, bought a caravan (collect next month) and I’m going to work 4 days a week from next month with a view to working to live and love, rather than living to work.
All the best. Rob
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