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£50,000/week sitting in the bank

Bourbons

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Mar 28, 2016
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Hey guys,

My company is setting up a savings account in which we'll store the VAT, due every quarter, to ensure it's not drawn out as dividends, used in growth etc., anything that may make us unable to meet the payment when the time comes.

I'm just brainstorming as to any investments that can turn around quickly to put this money to use?

It's +/- £50,000 each week, growing to around £600-650k by the time the VAT bill hits.

Maybe a dead end for me, but it's fairly common practice in companies to do this, so perhaps could be a good fund/service set up to give an ROI on people VAT money..?
 
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RazorCut

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Yes I used to do that. Set it and forget it. It's a right pain to find you're overstretched and don't have enough to meet the quarterly VAT bill because you spent it on extra stock.

A dedicated short term (3 month) rolling investment business sounds good but the rates are so low these days would it be enough to entice businesses to go through the hassle of setting it up? You are not going to get much above base rate (0.75%) on a no risk investment. Even at 2% PA 600k is likely to give a return of only 3k over 3 months. Compare this with their own bank and they are not going to be much better off. Plus having these sums within their own bank gives them a little more leverage if/when they need to raise any finance.

If your company is turning over £4m to £5m per quarter are they going to be interested in earning and extra 1-2k entrusting their money with someone else? Personally I don't think they are. Good thinking though.
 

MJ DeMarco

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I'm just brainstorming as to any investments that can turn around quickly to put this money to use?

Not really. Not without taking any undue risk. When it comes to taxes/government BS, I wouldn't mess around. Because if you miss a payment, the % interest/fines far exceeds any investment you can make.
 

Tommo

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I used to use a
Hey guys,

My company is setting up a savings account in which we'll store the VAT, due every quarter, to ensure it's not drawn out as dividends, used in growth etc., anything that may make us unable to meet the payment when the time comes.

I'm just brainstorming as to any investments that can turn around quickly to put this money to use?

It's +/- £50,000 each week, growing to around £600-650k by the time the VAT bill hits.

Maybe a dead end for me, but it's fairly common practice in companies to do this, so perhaps could be a good fund/service set up to give an ROI on people VAT money..?
money market account with Tyndalls, either in the Isle of Man or Bristol I forget which. Back then it was a good return but no idea how much interest you'd get. Whey aye man.
 

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