What to do with 100k business account funds

CPTM · 06-11-2019 03:40PM #1

Total profit this year will be about 100k. Kept there as rainy day money. Single director Ltd company with no debts. It's just myself. Total revenue was 185k of which I draw down an 85k salary. What could I do with the rest to make the most of it? Anyone know how much of a pension I can contribute?

Edit: if anyone has recommendations on where to go with this question, that would be appreciated too.

BailMeOut · 07-11-2019 09:08AM

you need to talk to your accountant as they will know exactly what to do. I would assume you will pay 12.5% corp tax on that 100k so you need to look at ways to reduce this profit and this is what your tax accountant is paid to do so setup a meeting asap. Is this 2018 or 2019 as PRSA contribution deadline was 31st Oct.

CPTM · 07-11-2019 05:32PM

BailMeOut wrote: »

you need to talk to your accountant as they will know exactly what to do. I would assume you will pay 12.5% corp tax on that 100k so you need to look at ways to reduce this profit and this is what your tax accountant is paid to do so setup a meeting asap. Is this 2018 or 2019 as PRSA contribution deadline was 31st Oct.

This is 2019 accounts - I was stung with corporation tax for 2018 which is why I'm asking. My accountant didn't advise me on that. Is there a difference between tax accountant and my normal accountant who does the books? My accountant doesn't seem to want to actively advise me on anything. He knows everything when I go to confirm it, but doesn't proactively tell me which is a little disappointing.

BailMeOut · 07-11-2019 07:05PM

CPTM wrote: »

This is 2019 accounts - I was stung with corporation tax for 2018 which is why I'm asking. My accountant didn't advise me on that. Is there a difference between tax accountant and my normal accountant who does the books? My accountant doesn't seem to want to actively advise me on anything. He knows everything when I go to confirm it, but doesn't proactively tell me which is a little disappointing.

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

CPTM · 07-11-2019 09:32PM

BailMeOut wrote: »

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

Thanks for the response.. Yes I think I'll do that(finding a new accountancy firm).

No kids yet (one on the way!).. Any idea how much I can move into a pension fund?

BailMeOut · 07-11-2019 09:45PM

CPTM wrote: »

Thanks for the response.. Yes I think I'll do that(finding a new accountancy firm).

No kids yet (one on the way!).. Any idea how much I can move into a pension fund?

Congratulations!

Anywhere between 15 and 40% depending on age. Do you have a PRSA setup?

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

CPTM · 07-11-2019 11:03PM

BailMeOut wrote: »

Congratulations!

Anywhere between 15 and 40% depending on age. Do you have a PRSA setup?

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

I don't have PRSA setup.. But I will certainly speak to an accountant about that. I'm in the 30-39 year age bracket.. So am I correct in thinking that I can put aside 185k * 20% = 37k into a pension fund tax free?

Thanks so much for helping me get started on this. I really do appreciate it.

thegolfer · 07-11-2019 11:38PM

BailMeOut wrote: »

Congratulations!

Anywhere between 15 and 40% depending on age. Do you have a PRSA setup?

https://www.revenue.ie/en/jobs-and-pensions/pensions/tax-relief-for-pension-contributions.aspx

This in in a personal capacity only.

Contributions from a company are based on the salary of the director, and can operate on higher multiples and percentages.

adam88 · 10-11-2019 05:11PM

BailMeOut wrote: »

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

What’s the deal with having kids as employees. Just curious !

adam88 · 10-11-2019 05:14PM

BailMeOut wrote: »

step 1, get a new accountanting firm that has experts in other areas so you can get good advice from a one stop shop.

Do you have any kids aged 16 or older you can employ?

What’s the deal with having kids as employees. Just curious !

thegolfer · 10-11-2019 05:56PM

adam88 wrote: »

What’s the deal with having kids as employees. Just curious !

Rather than pay your kids out of your own pocket, from after tax money, pay them through the company. Costs less ultimately.

However the employment must be a legitimate employment, they must work, and provide a service to the company. Revenue are cracking down on this type of thing, and have reversed P35 declarations that I am aware of, and treated the payment as a distribution to the parent\shareholder.

thegolfer · 10-11-2019 05:58PM

adam88 wrote: »

What’s the deal with having kids as employees. Just curious !

Rather than pay your kids out of your own pocket, from after tax money, pay them through the company. Costs less ultimately.

However the employment must be a legitimate employment, they must work, and provide a service to the company. Revenue are cracking down on this type of thing, and have reversed P35 declarations that I am aware of, and treated the payment as a distribution to the parent\shareholder.

What to do with 100k business account funds

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