Self Employed: Where to put my tax money?

[Comingtosunset]

For those who are self employed…and money savvy:

Each money I set aside an amount to save for my tax bill. It goes into my NatWest flexible saver (1.5% AER)

I can’t help but think I could get this money to “work for me” a bit more.

>This might sound like a silly question. But would it be wise of me to find another flexible saver, with a higher interest. Or a building society perhaps? I don’t know the difference)

Where do you put your tax savings money?

Offset mortgage. Don’t earn interest on it but don’t pay interest on that part of mortgage, with rates now may be the equivalent of much higher effective rate than savings account. take it in and out a you like. As not earning interest no tax to pay on interest.

I put into pb and then take out in jan

and repeat

If you make payments into your HMRC tax account, they will pay interest on your credit balance, at 1% below BoE base rate. Could be worth doing if you don't need to use the money for anything else before it's due and you have peace of mind to know the bill's paid.

Can you explain more about this pls?

Coventry BS Regular Saver - add in up yo £500/month and you get 4.5%, loosing only 30 days interest when you take it out. Depends how big your bill is really.
https://www.coventrybuildingsociety.co.uk/member/savings/all-savings.html

Just that each month I add 1/4 of what I’ve earnt roughly so that my pb amount gets higher each month so around nov/dec more than say feb /March

then Jan when I pay my tax bill I remove the amount into my bank account and pay to hmrc

Ah so you get paid interest whilst also having the chance to win? I put my tax/VAT money each month into an instant saver that currently is 3% interest. But I need to take out VAT bill money quarterly.

No. There is no interest paid on pb

but obv a chance to win a million plus all the other prizes each month

i do seem to be quite Lucky and win most months 25/50 on not many thousands

so no interest but I win more via pb iyswim than if in a 3% account

obv May not win anything all year. Some don’t for a few months and have the max of £50k 🙀🙀

How does it work for a limited co though? How you take the money out of your business to put into say PB etc without it being classed as a dividend? I’d love to get some interest on what I save to pay my corporation tax, personal tax and VAT!!

This thread refers to the self-employed not business owners

im thinking of dropping some into a PB but not sure how much

my DD just come £50 but she had it 13 years and was the first time winning anything!

I do own a ltd but I’m talking about my personal tax on this thread.

For your ltd company, you can get a business savings account. I have one with Tide and get 3. Something %

do you also need to have your business checking account with Tide to keep all the money in one place or can open a business saving account with a different provider? I am confused whether moving your money outside of you business LDT account will automatically considered paying income / dividends to yourself.