For three weeks starting two weeks ago, I’ve spoken about how company directors can gain more financial security and benefit from company profits and tax efficient way.
The first week I spoke about financial security and last week and this week will be about benefiting from company profits in a tax efficient way, and I’ll leave both links in the comments box below.
A lot of companies have built up significant cash reserves over the years, from retained profits. Company directors will always have to manage cash flow as a key part of the business, but some companies will have a surplus of cash over and above what they need to manage the company on a day to day basis or a year to year basis.
So with inflation at 6.5% and deposit rates at 0%, it’s difficult to justify keeping all money all money on deposit. What companies can do is that they can invest in a managed fund or an investment fund through the company.
The investment fund can set it up to full access just in case it might needed it in case of an emergency.
The taxation on the gains through a company is more efficient than on an individual basis, so it makes sense from that point of view as well.