@Scouser
I guess there is a few questions here:
I assume you own the company and are the sole shareholder in it? Is the 130k the company revenue after costs or is it what you take out in salary, with more funds left in the company ?
If you have a salary of 130k, with such a low mortgage and I assume reduced childcare costs at the age of your kids, I suspect you may wish to review your spending patterns. I would agree with others re some good tax planning.
Personally, I would review your salary and potentially reduce it (your marginal tax rate is very high), and consider diverting a reasonable amount of it into a pension fund. Assuming you have a 20-25 year working life left, you need to consider how you plan to fund your retirement. Add in any desire to retire early (for lifestyle, health or other reasons), this will be key. An Executive Pension plan definitely needs to be considered
I would also agree that you should fund the upgrade of the house from savings, but I would not really pay off the mortgage at 0.75% rate. I would just continue to pay it on a monthly basis, and imagine it is a very small drain given a combined income of 160k
Other things to consider are the usual death in service, income protection, life assurance etc.
Finally, how robust is the company/industry ? Are you an independent consultant in IT for example (or similar personal service type company), or is there an underlying asset other than the goodwill/service of yourself? If you got sick tomorrow morning, could the company survive in your absence? Are there other employees in the company etc