Investing Company Profits - Premium Bonds?

Joey122

I run a small business and theres quite a large amount of cash that is in the bank account earning 1%

My accountant says I cannot withdraw this money into my own name as that becomes a 'loan'

Does anyone know if i can invest this money in premium bonds? How would winnings work if they were allowed.

Interest rates seem tiny on business accounts -1% at best.. Any ideas on how to improve that

RayWolfe

Yea great idea. Presumably you wont mind paying Corporation Tax on your winnings?

Pennywise

I don't think that they allow a company to buy premium bonds - it's only available to individuals, so you'd have to draw the money out to buy them personally, paying tax as wages or dividends.

Any

Joey, either you withdraw it as a wage, bonus, dividends or something (director's loan) and you can do with it what you want, or you keep it in the company and then it is companie's money.

You cannot have both worlds - have Ltd liability (I am supposing your company is Ltd, that is why your accountant says it will be a loan) and be one with the business.

For business's with money there are also deposit accounts where you can earn better money... check with your bank manager.

I remember at one of my jobs few years ago owners sold part of the business and then had loads of cash in a bank account - so we deposited large amounts of money for a week at a time into a deposit account where you cannot touch your money (they were waiting to buy another business)... I don't remember what it was called now.