Lump sum

Red_Elle

Hi

Not sure if this is the right place for this.
I have just sold my house and am due to exchange and complete within the next week or so (providing nothing goes wrong).

My query relates to the money that I will have from the sale of my house.

I will have a sum of approximately £40k after everything relating to the house move comes out.

I plan to use £10k to renovate the house.

The remaining £30k I plan to use to set up a business. I do not anticipate needing all of this, but the move was primarily to facilitate the business startup without worrying about costs for the first year.

I'm just not sure what to do with the money in terms of where to put it. The £10k to do up the house won't be around for very long, so that's not the issue.

I am planning on setting up as a limited company. However, I do not want to put this money directly into the business and then pay tax on whatever I pay myself. Not sure if I'm making sense here.

The nature of the business means that start up costs will be no more than £2000. The rest of the money I will need to cover me to pay people (I am setting up a recruitment agency) on a temporary basis, as they need to be paid straight away, but clients don't always pay straight away.

The bulk of the money will cover my petrol, lunches, all of my household bills, food etc. So, in effect, my wage as well as covering company expenses.

Should I just keep it in my current account (Barclays) earning virtually no interest or should I put it into a business account (but if I do so will I incur charges when I pay myself)?

Thanks for anyone who can a) makes sense of this and b) help!

Elle

debbie42

Couldn't you just put it into an easy access higher rate savings account, until you need it?

edited to say: Do you have an accountant? If so, they may be able to advise on the tax side of the company issues.

liitleblackcat

You need to find an account which enables you to transfer quickly to your current account if you have to pay out a cheque or need cash. The best easy access savings account at the moment that does this quickly and easily seems to be Kaupthing Edge (6.5% AER). It has to be linked to another account so your Barclays current account can do that. It takes 3 working days to transfer money in and money out so you may need to leave a few thousand in your current account and then top it up from your savings when it runs low. The 3 days is counting both the starting day and the ending day so if you request a transfer on a Monday it should be in your linked account on Wednesday (as long as you don't do it late in the day).

Red_Elle

Thanks guys, sounds like good advice. Following an accident, I can't get to an Accountant just yet. My first port of call when I've moved is to go and see one, providing I can walk more freely then.

Makes sense what you have both said though.

debbie42

Do you know anyone that is recommended? I'd ring someone up, just for the basics, before you actually start trading.

Red_Elle

Hi, I actually recruit accountants, so I know a lot of the local firms, which helps. I'll be chatting to a few candidates of mine to get some free advice I think and also checking with clients of mine who they use and recommend.