Luke’s ‘Know-how’ – November 2021 edition
This month we hear from another of our awesome advisers, Luke, about how we help businesses as well as individuals make the most of their finances.
Taking care of business
Did you know, we don’t just help people with their private finances? We can also bring real value to business owners and their company finances.
In my experience, business owners are some of the most interesting people that we speak to. When you speak to a business owner about their business their passion just permeates through every word. You can feel yourself getting passionate alongside them. It’s contagious!
That’s why I am always happy to speak to business owners, and get excited when I see a new appointment in my diary. Its an opportunity to speak to someone about something I potentially have no knowledge of. Whether they work in medical supplies, marketing, or a mechanics it’s a chance to learn something new. Learning is something that has always excited me, and I don’t see that changing any time soon.
The next best thing is that although I do not know anything about their business, I am confident I will be able to help them in one way or another. So, we both get to learn something from the process and hopefully educate each other. I may not be an expert in medical supplies, and I am certainly not an expert in cars, but I am an expert in finance.
How do we help?
When it comes to business owners, finance is an area that is often in need of some help. They focus so hard on their area of expertise and put all their time into this. And rightly so! This is not a negative, it’s the complete opposite. This kind of focus is what has led them to be a successful business owner! That’s why I always encourage business owners to continue with this level of focus. Let me do the leg work on the finances so you can keep being great at what you do.
So, what is the main enemy of a successful business owner making the most out of the money within their business? The dreaded HMRC!
As soon as you start generating profits from your business there is always one person standing with their hand out; the taxman. Now I am not saying we should avoid paying taxes as they pay for a lot of important services that we all use. So, paying your fair share is fine, but paying over the odds? That is where we need to use proper planning.
Corporation tax and increasing dividend tax can take a serious amount of money before you get anything from your business. So how can you get this money out of your business and into your pocket?
PENSIONS!!! Okay, I know that may not be as exciting as what you were expecting, hence why I capitalised it and added 2 extra exclamation points. But before you close this page and curse me under your breath, hear me out.
Did you know you can contribute directly from a business into a personal pension, and it counts as an expense for the business. What does this mean? For those contributions:
• No corporation tax • No dividend tax
Sounds good doesn’t it, so why don’t more people do this? The simple answer is, they don’t know about it, or don’t understand how it works. Well, HMRC are hardly going to advertise it for you, are they? Also, pensions can sound, boring, scary, unnecessary, even overwhelming, can’t they?
Well that, as you know, is where we really add value to all our clients. We try and remove the shroud that sometimes surrounds pensions and other financial tools and help clients to understand the benefits. Some clients have saved tens of thousands with our help.
The best thing is that money then goes towards the important things in life. That’s different for every person whether it is giving money to your children, retiring early or going on big holidays. Helping people achieve their own individual goals is where we thrive; that’s my favourite bit of the job and what motivates me every day.
Do you know anyone with their own business who we could help to maximise the money in their business, and achieve their business and personal goals? Feel free to pass on our details, or, with their permission, give us their number, and we’ll give them a call to see what we can do for them.