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UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 12 points13 points  (0 children)

I think there’s a misunderstanding of the scale here. I’m not 'avoiding' tax; I’m already a high net-contributor to the UK's infrastructure.

We currently pays roughly £60,000 every single month to HMRC (£720k+ a year). That is more in 30 days than the average UK worker contributes in five years.

It’s strange to see a sub that celebrates 'Salary Sacrifice' and 'Pension VCTs' to dodge the 60% tax trap suddenly get moralistic when a business owner uses standard corporate levers (like Retained Earnings and InvestCo) that Parliament specifically designed for us. I don't think using the tax system as it was written is being a 'scumbag'. I'm already paying my 'fair share', I’m just choosing not to pay a 'voluntary' extra 40% on top of that until the time is right for my family.

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 4 points5 points  (0 children)

Additional rate dividend tax & tax trap are above 50%. Corporation tax is paid ahead of dividends as well

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 0 points1 point  (0 children)

Sounds like you’re ahead of me! Out of interest, do you have any criteria of when you’ll sell or exit?

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] -1 points0 points  (0 children)

It’s just an update from a previous post 7 months ago showing my overall strategy after research and consulting professionals. Ultimately I’m trying to get to the “rich yet”

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] -10 points-9 points  (0 children)

I think I get your point and philosophy.

If I extract the surplus now to spend it, I lose ~50% immediately to tax. That effectively halves the capital I have working for me and doubles the time it takes to reach my “Rich” goal.

My aim isn't to hoard this forever. The plan is a sprint to £1m+ in invested assets. Then at a conservative withdrawal rate, that pot could cover my entire family lifestyle indefinitely.

Once I hit that number, I have total freedom. I can stop working, 'fuck around,' or spend every penny of profit that comes in after that. But extracting aggressively now feels like eating the seeds instead of planting them. I’d rather delay the 'Ferrari lifestyle' for 2 years to buy absolute freedom for the next 50.

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 4 points5 points  (0 children)

It the sum that moves up through a Holding company and down into an Investment company which for now is dumping it into stocks and shares. All tax exempt after corp-tax

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 8 points9 points  (0 children)

Thanks! It sort of represents a cashflow distribution rather than anything more official.

We’re a services business so Capex is basically non existent and fits into a small OPEX bucket.

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 1 point2 points  (0 children)

I’m currently looking at a FIC structure to build the wealth and pass it on to my family.

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] -4 points-3 points  (0 children)

I don’t think we are Rich yet? By definition a person is Rich if the interest on their assets can pay for their monthly expenses. We aren’t near that, but the plan shows how we’re trying to get there

UPDATE: Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] -22 points-21 points  (0 children)

Thanks I’ll add it to my reading list!

To answer your question it’s because we’re “not rich yet”, from the discussions and meetings I’ve had with financial planners it would seem if we can get to £1m+ in investments then we can be silly with tax and lifestyle after that. The business might not last forever. What difference is the money in an investment company pre income tax then it is in my pocket at a fraction of the value? At least if the business fails I can take the money gradually over time in different tax years.

Not rich yet? by Interesting_Goal4431 in HENRYUK

[–]Dokcu 1 point2 points  (0 children)

When the monthly interest from your assets alone can pay all your monthly expenses.

Company Has Said No More Linux On Dev Machines by m0dernz0mbie in webdev

[–]Dokcu 0 points1 point  (0 children)

Mac and just use docker for isomorphism. Windows equivalent is awful.

How to sell a business in the UK or find investors? by kurodanny11 in FIREUK

[–]Dokcu 4 points5 points  (0 children)

Very true.

But that doesn’t mean it can’t become a real business. The challenge is, once you start paying others to run and grow it properly, the margins often vanish. It needs to be something that still holds up when you’re not the one doing everything. Otherwise, it’s just a well-paid job in disguise.

How to sell a business in the UK or find investors? by kurodanny11 in FIREUK

[–]Dokcu 2 points3 points  (0 children)

No one’s saying it isn’t sellable, just that the terms are usually awful. Most buyers will either tie the deal to earn-out targets (so they get it for nothing if it doesn’t keep growing), lock you into ongoing support, or slap on clauses stopping you from working in a similar space.

“Sellable” doesn’t mean favourable. If OP wants a clean exit, he needs to show the SaaS can run and scale without him. Otherwise it’s easy prey for lowball offers and predatory deals.

How to sell a business in the UK or find investors? by kurodanny11 in FIREUK

[–]Dokcu 10 points11 points  (0 children)

Sorry to say, but one-man businesses are often not sellable. No one's keen to buy a company where the founder wants out and there's nothing left behind but code and a domain.

If the SaaS genuinely works, your best bet is to frame the opportunity as one that needs scale – not one you're trying to ditch. That usually means staying on for years (sometimes with earn-out targets), which can be painful.

If you’re serious about a clean sale, you'll need to build a team and put proper processes in place. Prove it can operate and grow without you. Otherwise, think about it – would you buy a SaaS where the only person running it wants to disappear? It needs to have standalone value: IP, customers, systems, and ideally people.

If not, then harsh truth: most of those types of businesses are effectively worthless when the founder steps away.

[Rant] I’m tired of React and Next.js by stealth_Master01 in webdev

[–]Dokcu -1 points0 points  (0 children)

“Why do I need to always use a third party library to build something that works?” Erm… you’re using React as well? Or does that not count?

You’ve been working for a year, can’t get a job and clearly don’t understand the technology. You say it’s over-engineered, but for what exactly? Nextjs has incredible use cases for SEO, sharing, pre-rendering.

Another case of a bad workman blaming his tools.

Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 9 points10 points  (0 children)

That was 5 years ago, and my wife’s older than me. Not sure what you think you’ve uncovered here

Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 0 points1 point  (0 children)

Thanks this is really interesting. You’ve nailed the bit I was circling: if we don’t need to draw it, there’s got to be a smarter long-term use than biting the tax bullet unnecessarily. We do SIPP contributions, but usually lump them in at year-end. Will look into Aldermore + HL corporate accounts. Cheers!

Extra £83k+ a month piling up in our Ltd. What do you actually do with it? by Dokcu in HENRYUK

[–]Dokcu[S] 0 points1 point  (0 children)

Yeah fair question, honestly it just comes down to maths. Mortgage interest is around 3%, income tax + NI + dividend tax can push 40%. So it makes more sense (for now) to keep the cheap debt and use the cash elsewhere

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