Self employed putting tax aside for HMRC

wicketts

Hi. Newbie here. I am looking at going self employed and want to set aside the tax portion of my income to pay my tax bill a year later. What’s the best place to put the monies until the HMRC bill is due to be paid ? I am already in receipt of a private pension. So my personal allowance is already accounted for. Thanks in advance 

SiliconChip

Pick your favourite.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ 

Given that you'll know when the tax has to be paid you may want to consider fixed term accounts that fit the timing as well as instant access.

wicketts

Is a normal savings account ok or a Could I use an ISA ? 

eskbanker

wicketts said:

Is a normal savings account ok or a Could I use an ISA ? 

You can use whatever you like!

lr1277

As you are self employed you can use an ISA as the savings do not belong to the business but yourself (is my understanding).

However as an aside, some banks frown upon using your personal account to run your business so may close your personal account. So if your cash ISA is linked to your current account and then the current account is closed, then I don't know how your recover the funds in the ISA.

Perhaps others can  advise?

wicketts

I’ll be working for one person and they will pay me on a self employed basis. First time I’ve had to sort my own tax and NI. So not a real business in that sense. 

lr1277

I don't know much about this but suggest the following.

Keep your personal finances separate from your business dealings. If you are going to use a personal current account, open a new account with a different bank to your main personal account. If you are using a cash ISA, link that to your newly opened current account.

If you choose to open a business account, then I suspect many flags will be raised if money goes from there into a cash ISA. Perhaps get more advice or ask on the small business board.