Financial advice for business owners
and company directors
The financial health of a business generally has a direct impact on the personal financial situation of its owners and directors. If you are a business owner, much of your wealth may well be tied up in your business as retained profits and the value of your shares. Working closely with your accountant and other professional advisers, we make sure we understand all aspects of your business and personal finances and then recommend ways of organising them to help you reduce risk, to you personally and to your business, and to achieve your financial goals.
Tax-efficient remuneration and succession planning
Building a business can take years of hard work and dedication, and often a bit of luck. You and your fellow directors will want to ensure that money you take out of the business, whether through salary, dividends or pension contributions, is as tax-efficient as possible for you and for the business. In due course you may want to sell the business (or your shares in it) or maybe you envisage passing it on to your children. To achieve this efficiently requires careful planning.
Here are some of the aspects of financial planning for you and your business we can help you with:
- extracting profits tax-effectively.
- buying business premises as tax-efficiently as possible.
- buying and holding business premises within a pension
- lending money to your business for new plant and machinery.
- planning your exit strategy in a way that minimises tax and gives the business the best chance of longevity.
Directors’ pensions
Pensions are one of the most tax-efficient ways for business owners and company directors to save for retirement and to remove pre-tax profits from a business. If your company pays the contributions on your behalf, no employer or employee National Insurance is payable on them. Plus, employer contributions are an allowable business expenses when calculating corporation tax.
We are experienced in setting up and running suitable pensions for directors, including SIPPs and SSASs, together with ongoing investment strategies. In particular, SIPPs and SSASs offer considerable flexibility in terms of what can be held in them and how you can use them to fund your business.
The financial means to survive when the unexpected happens
In the meantime, unexpected things can happen – and have a devastating impact on the business and on your personal finances unless you have taken out the appropriate insurance. Business owners are often surprised when they realise just how much the death or serious illness of a shareholder, loan guarantor, key director or employee might cost the business.
Here are some of the unexpected scenarios that could have an adverse financial impact on the business and its owners and directors, and ways of protecting against them:
- What would the death of someone crucial to the business have on its day-to-day capacity, performance, sales, service and product delivery, client relationships, cashflow, profits, and dividends? How long would it take to replace such a valuable key person and what would the cost be? We will talk through these scenarios with you and arrange any insurance required, giving you peace of mind that any financial consequences are covered.
- What succession plans does your business have? What could be the financial impact on the business and other shareholders if a major shareholder were to be declared bankrupt or die, and the forced sale of their shares required? We will help you put in place a plan for this situation that ensures that enough money is available to facilitate a smooth succession, giving the business the financial stability it might otherwise lack.
- If the company has borrowed money from a director or their pension scheme how would it repay the loan if it were to be recalled because, for instance, the lender dies? We can arrange insurance against this with a suitable level of cover.
We can identify and help you plug gaps such as these, making sure you have the right cover at the right price. If you already have insurance when did you last check that you the cover you have is still appropriate? The amount of cover you need might have increased or decreased in recent years, depending on how your business and its key employees have evolved.
We are also experienced in working with business owners and their usual legal and tax specialists to plan and implement business Wills, which set out the legal side of succession and continuity for a business.