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Don’t leave too much money in your business account!

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Don’t leave too much money in your business account!

Many businesses ‘stack the cash’ in their business accounts but although it can give a comfortable feeling, in reality it can be very costly!

It is important to have enough for a comfortable business cash flow but there are far better options available if you don’t need the money in the short term. We have recently saved a family business £155k in tax! That’s £32k corporation tax, £55k income tax (assuming they would have otherwise extracted it from the business) together with £68k inheritance tax in the event of death.Not only are the tax savings very significant but also the money is now likely to grow significantly in value too (compared to losing value in the bank account – with inflation taken into account).

And there is more… In the event of death this money can be placed into a Trust which can ensure it is effectively kept in the bloodline (reducing the possibility of loss from the family with divorce/death/bankruptcy).

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