I am software development consultant acting as a sole trader (self employed). My main expenses are ultimately paying my self and some hosting.
Every time I have an invoice paid I put a percentage into an account to later pay tax from.
This all works well enough. However I have lots of money sitting in an account for most of the year, not generating much interest.
Is there something better I could be doing with my tax savings?
With the caveat that losing (too much), if an investment goes sour, would be bad; as the tax office has nasty penalties.
Ideas I have had:
- Term deposit/CD (maturing at tax time)
- Invest in stock market with a savings buffer
- Invest in stock market with some form of derivative, to hedge downward movements
- Vegas! (Not really 😜)
*Any suggestion will be passed by an accountant, yada yada.
**Although this question used a scenario about tax on income, it equally applies to other large personal tax bills (Property tax etc)