ISA Self-employed query
Discussion
I'm an IT contractor have been for many many years.
I've got an ISA and as April approaches I'm wondering what's the best thing to do financially here.
Bit of background, I have a business saver account which I get around 3-3.5% interest, it's got a good chunk of cash in there and it will generate a few £K's interest PA. For me to top up my ISA it would have to come from either salary or dividends, so would ultimately pay tax on by having a dividend then transferring to my personal ISA.
The above doesn't sound like the best thing to do, and I should just leave the money in the business rather than pay the tax, but at some point I'll need the money from the business when I come to retire etc, or big purchase - house/car etc.
So should I just leave as-is and avoid the corp tax, or is there something else I could do?
I've got an ISA and as April approaches I'm wondering what's the best thing to do financially here.
Bit of background, I have a business saver account which I get around 3-3.5% interest, it's got a good chunk of cash in there and it will generate a few £K's interest PA. For me to top up my ISA it would have to come from either salary or dividends, so would ultimately pay tax on by having a dividend then transferring to my personal ISA.
The above doesn't sound like the best thing to do, and I should just leave the money in the business rather than pay the tax, but at some point I'll need the money from the business when I come to retire etc, or big purchase - house/car etc.
So should I just leave as-is and avoid the corp tax, or is there something else I could do?
bit puzzleed....
you mention 'leave things as they are' and refer to the business savings account and also Corp Tax. Perhaps i misread, but if you leave things 'as are' you'll be hit with Corp Tax, the only way not to - is to pull out as much as you can into a SIPP/SASS.
It's a royal pain, as you'd need your accountant to give you a quick n dirty idea of how much profit/corp tax there'll likely be, and then get that transferred to the pension before year end; they'd then have to tidy up the accounts afterwards.
To the nub of the question. No, i would neever leave money in my business - even if its earning interest, because as you say, sooner or later you'll need to pull it out and pay div tax to get it into an ISA. So if that's your line of thinking, then 'now' is a better time (IMO) to do that.
you mention 'leave things as they are' and refer to the business savings account and also Corp Tax. Perhaps i misread, but if you leave things 'as are' you'll be hit with Corp Tax, the only way not to - is to pull out as much as you can into a SIPP/SASS.
It's a royal pain, as you'd need your accountant to give you a quick n dirty idea of how much profit/corp tax there'll likely be, and then get that transferred to the pension before year end; they'd then have to tidy up the accounts afterwards.
To the nub of the question. No, i would neever leave money in my business - even if its earning interest, because as you say, sooner or later you'll need to pull it out and pay div tax to get it into an ISA. So if that's your line of thinking, then 'now' is a better time (IMO) to do that.
greengreenwood7 said:
No, i would neever leave money in my business - even if its earning interest, because as you say, sooner or later you'll need to pull it out and pay div tax to get it into an ISA. So if that's your line of thinking, then 'now' is a better time (IMO) to do that.
It’s not as straight forward as that. If you not far from shutting the business down for example. Gassing Station | Finance | Top of Page | What's New | My Stuff