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The past 12 months have put immense pressure on SME firms, however many of you are actually doing well and thriving.
If you are accumulating, or have accumulated a pot of Corporate Savings, there a few things you must consider:
- Do you know what interest (if any) your Corporate Savings are getting with the bank? Its more than likely negative at present.
- Do you know that the value of your money may be standing still, or may be decreasing due to the effects of inflation?
Much like your pension or regular savings, your company can invest their corporate earnings into a bond or regular savings plan, putting your hard-earned money to work.
How do Corporate/Company savings work?
- Your company will invest in a mixture of asset classes such as bonds, equities, cash, property and alternatives, tailored to your company’s risk profile.
- This mix of funds will give your company access to potentially higher returns than deposit rates over the long term.
- Company Savings benefit from a much lower rate of exit tax of 25% when compared with a Personal Savings Plan where exit tax is 41%.
- This tax is only applied to the growth on withdrawal, assignment, death or every 8 years and means that your company savings can potentially grow up to 8 years without being taxed.
- You can invest in Life Assurance companies with a variety of funds and fund managers – all with proven track records.
- Much like your personal savings, your company should set aside some of these savings to meet the short-term cash flow needs of your business.
We can help you achieve potentially higher returns and greater tax efficiency with your Corporate Savings. So what are you waiting for – make your company money work for you!
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