Investing company funds - which platforms

jamei305

How about borrowing from the company and investing personally?

stphnstevey

jamei305 wrote: »

How about borrowing from the company and investing personally?

Directors loans have special rules for repayment and harsh tax consequences if not repaid within 9m end of tax year. They are also seen as a red flag to HMRC for inspection

This makes you liable personally for the tax - which, depending on your use of allowances, maybe a benefit or hindrance

Lrimas

Thought it would be good to give a bit of an update.

I applied for an LEI for my company via BritishLEI (I tried going through London Stock Exchange first but they were more expensive and their application form was extremely complicated).

I then got an account on III for my company. Application was fairly straightforward - I had to fill in a few forms and post them. There was only one question I had to double check with my accountant.

I'm now trying to work out how to manage the investments in FreeAgent (my accounting software). My accountant confirmed that I should treat it like another account and that I am also allowed to invest money earmarked for VAT/tax as long as I can make those payments.

The only question is how I record profits/losses. It appears as if it is managed the same as assets and I have to record the gains/losses but I won't be taxed on them until I sell the investment. I have a new accountant and I'm hoping they can confirm this for me (but they don't seem to be great either. At least they are cheaper).

Thanks again to Dunstonh & stphnstevey.

stphnstevey

Lrimas wrote: »

Thought it would be good to give a bit of an update.

I applied for an LEI for my company via BritishLEI (I tried going through London Stock Exchange first but they were more expensive and their application form was extremely complicated).

I then got an account on III for my company. Application was fairly straightforward - I had to fill in a few forms and post them. There was only one question I had to double check with my accountant.

I'm now trying to work out how to manage the investments in FreeAgent (my accounting software). My accountant confirmed that I should treat it like another account and that I am also allowed to invest money earmarked for VAT/tax as long as I can make those payments.

The only question is how I record profits/losses. It appears as if it is managed the same as assets and I have to record the gains/losses but I won't be taxed on them until I sell the investment. I have a new accountant and I'm hoping they can confirm this for me (but they don't seem to be great either. At least they are cheaper).

Thanks again to Dunstonh & stphnstevey.

Good to hear how you got on and that you managed to complete what you set out too

May I ask where you found out about BritishLEI and did you check out the legitimacy of the company? I cant see it listed here as Issuing Organisation, but this might not be an up to date list

I noticed you mentioned opening an investment company and the reason being loss of entrepreneurs relief on your holding company. I have seen this for BTL, but do you have any links to articles that explain the need for this? I thought if your investment income formed a certain % of your trading income (20%?) that their was unlikely to be a loss of entrepreneurs relief

Lrimas

Hey stphnstevey, sorry - I didn't notice that I received a response to this.

BritishLEI was recommended to me by a friend. I did not check their legitimacy however they did give me the LEI before asking for payment. I have not had any issues with it and I've been investing with II since.

You are also correct about the 20% (note that from my research this is 20% of trading activity which could also be your time). At the start this is not something to be concerned about but since I do eventually want to replace my income with investment income it could be an issue in future.

Having a second company also gives me the option of closing the first company (and getting a big chunk of money at 10% tax) while keeping the second company open as a retirement company (which can continue to pay me a salary and dividends at a lower tax rate. I will also continue to accrue NI years).

The benefits needs to be weighed against the extra effort/costs of the second company though (and I decided to stick with one for the time being due to this.)

stphnstevey

I am not vouching for these, but there is a list of LEI suppliers here sorted by price: https://lei.codes/

Large companies like Bloomberg are on the list of suppliers and one of the cheapest (possibly depending on currency exchange rates)

stphnstevey

Lrimas wrote: »

Hey stphnstevey, sorry - I didn't notice that I received a response to this.

BritishLEI was recommended to me by a friend. I did not check their legitimacy however they did give me the LEI before asking for payment. I have not had any issues with it and I've been investing with II since.

You are also correct about the 20% (note that from my research this is 20% of trading activity which could also be your time). At the start this is not something to be concerned about but since I do eventually want to replace my income with investment income it could be an issue in future.

Having a second company also gives me the option of closing the first company (and getting a big chunk of money at 10% tax) while keeping the second company open as a retirement company (which can continue to pay me a salary and dividends at a lower tax rate. I will also continue to accrue NI years).

The benefits needs to be weighed against the extra effort/costs of the second company though (and I decided to stick with one for the time being due to this.)

Im applying to Hargreaves and Lansdown. Called yesterday and they said a company account was available. I asked about LEI and he said he couldnt see it on the form. He checked and came back saying that I will need a LEI to deal in equities. Might fill out forms and see how far I can get without one

I have gone with H&L for share dealing as Interactive Investor has a £90 annual fee and although it can be used as a dealing credit, I dont think I will be trading that much, preferring a buy and hold strategy

H&L normal share dealing charge is £12, compared to III £10, but have a £1.50 RS account in the same way III have it for £1
H&L RS is limited to a smaller number of ETFs, FTSE 350 shares and ITs. But there is some world and S&P 500 trackers I would use. The list is here, but trying to do this form my personal share dealing account, there are more than is on this list
https://www.hl.co.uk/investment-service ... ar-savings