Business financial planning

Many businesses build up cash reserves beyond what's needed for working capital, particularly after a strong trading year. Left in a low-interest business account, this cash can lose real value to inflation over time. We help business owners decide whether to invest surplus funds within the company structure, taking into account corporation tax treatment, the impact on Business Asset Disposal Relief (formerly Entrepreneurs' Relief) if you're planning to sell in future, and how holding investments might affect the company's trading status. We'll also look at whether it makes more sense to extract some of that cash rather than invest it, and structure a solution around your wider business and personal goals.

Employer pension contributions are one of the most tax-efficient ways to reward directors and key staff, and to reduce a company's corporation tax bill, since contributions are usually treated as an allowable business expense. Unlike a salary or bonus, employer pension contributions aren't subject to National Insurance for the business or the employee, and they fall outside the recipient's income tax for that year. We advise on how much can be contributed within annual and lifetime allowance limits, how to structure contributions across multiple directors or employees, and how this fits with succession and exit planning for the business.

If a shareholder dies or is diagnosed with a critical illness, their shares typically pass to their family or estate, not automatically to the remaining shareholders. Without a plan in place, this can mean losing control of part of the business, disputes over valuation, or surviving shareholders being unable to raise the funds needed to buy back the shares. We advise on shareholder protection arrangements, combining suitable life and critical illness cover with a cross-option agreement, so that remaining shareholders have the funds and the legal mechanism to retain control, while the departing shareholder's family receives fair value for their stake.

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Every business has people whose knowledge, client relationships, or specialist skills are difficult or impossible to quickly replace. If one of these key individuals died or was unable to work due to serious illness, the financial impact (lost revenue, the cost of recruiting and training a replacement, or reassuring lenders and clients) can be significant. Key person insurance provides the business with a lump sum to cover this financial loss and buy time to adjust. We help identify who in your business represents this kind of risk and structure cover appropriately, including consideration of how premiums and any payout are treated for corporation tax purposes.

A well-structured employee benefits package can help attract and retain talented employees while supporting staff wellbeing and engagement. We advise on workplace pension schemes, group life assurance (death in service cover), private medical insurance and other employee benefits, helping you put in place solutions that are appropriate for your business, your workforce and your budget.

Salary, dividends, pension contributions, and directors' loans each carry different tax treatment for you personally and for the company. The right mix depends on your income needs, your other sources of income, your marginal tax rate, and your long-term plans for the business. We work alongside your accountant to plan how and when to extract profits, aiming to reduce the combined tax paid by you and the company, while keeping enough retained profit in the business to support its growth and stability.

Selling your business is often a single, sizeable capital event after years of it being tied up in a company you controlled day-to-day and the financial planning priorities change significantly once the sale completes. We help business owners plan ahead of a sale to make efficient use of reliefs such as Business Asset Disposal Relief, and after completion, we advise on how to invest sale proceeds, structure your income in retirement or your next venture, manage inheritance tax exposure on a now-larger personal estate, and make sure the proceeds are working towards your long-term goals rather than sitting as cash.