Introducing Your CFO. . .

Valuing your company is an important step in understanding your business’s financial health, which is something we should probably look to do more often. Valuing your company isn’t just an exercise for those looking to sell; it has many benefits including: Understanding current performance Predicting growth Putting a value on your time and effort Exploring what strategies are working (or not)  There are a variety of methods you can use to determine the value of your business, including a discounted cash flow analysis, asset-based valuation, or a market-based approach. Each method has its own strengths and weaknesses, so it’s important to understand which approach will best suit your needs. What affects the value of a business? The size, assets, profitability, competitive edge, customer base, market position, and industry trends are just a few of the variables that determine a company’s worth. The value of a firm can also be significantly impacted by other elements like the state of the economy, governmental regulations, and technological developments. Ways you can value your business Asset valuation An asset valuation may be the best way to understand the whole value of your company if it has significant assets. Assets come in two different varieties: tangible and intangible. The physical items that belong to your company, such as your office space, inventory, land, and equipment, are known as tangible assets. Any non-physical assets, such as your company’s brand, reputation, and intellectual property, including copyrights and patents, are considered intangible assets. You deduct the costs of your business liabilities (such as debt and outstanding credit) from the total worth of your tangible and intangible assets to arrive at your company’s Net Book Value (NBV). Because this approach ignores “goodwill” toward the company, which is a technical accounting term for the gap between a company’s market value (what people are ready to pay for it) and the value of its net assets, asset valuation frequently produces the lowest value for a business (assets minus liabilities). Industry best practice Different industries have different needs. Additionally, some enterprises may be bought and sold more frequently than others. There may be specific guidelines that you may use as a roadmap to help you through the business valuation process in the sectors where business sales are common, such as retail, where business turnover, client volume, and outlet count are major indicators of worth. Entry valuation The goal of entry valuation is to ensure that the company is not overvalued or undervalued, which could lead to financial losses; it’s a framework that explores how much it would cost to establish a similar business. A good way to get an accurate estimate is to create a list detailing start-up cost, the price of acquiring tangible assets, employing and training staff, establishing a customer base, and developing products and services. You would use this process to determine the value of a business before it is acquired, merged, or taken public. It typically involves analysing financial statements, evaluating market conditions, and assessing the competitive landscape to establish a fair market value. Discounted cashflow This valuation method is one the trickiest as it looks at the cash a business generates and discounts it back to the present day to arrive at a value. It considers the time value of money and takes into account the cost of capital, the company’s risk profile, and the growth of the company. It also considers the company’s expected future cash flows and the cost of capital. Despite it being quite tricky, this is the most common method used to value companies and is widely accepted by business analysts and investors. Comparable analysis Essentially, this method looks at what businesses, that are like yours, have been sold and for how much. Comparable analysis gives an observable value for your own business, based on what rival or similar companies are worth at present. So, there you have it! Different ways of valuing your business. While some are more complex than others, they should give you a starting point when it comes to thinking about your business and what it’s worth, especially if you are ready to grow (and not simply sell). Additionally, you may want to consult a professional business appraiser to get an accurate valuation. Ultimately, valuing your company can help you make more informed decisions about strategic investments and long-term planning. If you’re anything like me, you’re in this for the long game and despite economic ups and downs, you’re ready and enthused to add value to your business in every way possible.

Planning your best exit strategy starts long before you’re ready to price your business. Business owners who begin planning their exit strategy early are consistently the ones who secure the best valuations, the best buyer terms, and the most efficient transition process. Exit strategy planning is not something to start at the point of sale, it is a multi year journey that shapes the eventual success of your exit. So what is the best exit strategy for you? For professional services firms in particular, where value is tied to intellectual capital, client relationships and predictable recurring revenue, tailored exit strategy planning is not optional. It is the difference between achieving a premium valuation and leaving significant value on the table. In this guide we explore the steps, financial systems and governance structures that ensure you are genuinely Planning Your Best Exit Strategy from a position of strength. Why Planning Your Best Exit Strategy Starts Long Before You Sell Many business owners wait too long to begin preparing for an exit. In the professional services industry especially, company value is built on stability, leadership capability, forecasting accuracy and quality of earnings. Buyers look for predictable profit, transferable delivery processes and strong client retention metrics. If the foundations are weak, buyers either reduce their valuation or walk away. This is why planning your best exit strategy early makes sure the business can withstand due diligence and impress potential acquirers. Key Steps For The Best Exit Strategy: Strengthening financial reporting Improving cash flow predictability Increasing recurring or retainer based revenue Documenting delivery processes Reducing founder reliance Presenting strong governance Demonstrating scalable systems Professional services firms such as accountancies, IT consultancies and marketing agencies benefit particularly from early preparation because many aspects of their value lies in relationships, delivery methodology and intellectual property. "The best exit strategies are won years before the sale, not in the negotiation room." Exit planning is a strategic discipline, not a last minute task. Buyers pay premiums for predictable, structured, well governed businesses. Who Makes The Best Exit Strategy Coach? It’s highly likely that an exit strategy coach has handled more exit planning than your internal team. Working with an exit strategy coach can significantly accelerate your ability to prepare for a premium business sale. An experienced coach brings structure, discipline and accountability into your exit journey. For 8 figure UK companies, the role of a coach provides clarity on value creation, performance improvement and how to position the business for strategic buyers. The best exit strategy coach typically guide your team to: Identifying value drivers within the business Strengthening operational efficiency Preparing leadership teams for transition Aligning the business to the expectations of private equity, trade buyers or internal successors Streamlining financial reporting for due diligence Positioning the company as a strategic acquisition target Professional services firms often require specialised coaching because buyers scrutinise knowledge transfer, client dependency, delivery repeatability and cultural fit. The best exit strategy coach understands these nuances and prepares your business accordingly. For example, a management consultancy planning to sell within three years may use a coach to restructure service delivery, reduce founder involvement, increase recurring revenue and build a performance dashboard that proves predictable earnings. These adjustments enhance the valuation significantly. A coach also helps leadership teams understand deal structures, earn outs, completion accounts, warranties and post acquisition expectations. Many business owners enter negotiations without fully understanding these factors, leading to costly oversights. A coach ensures you negotiate from a position of knowledge and strength. Working with a coach also aligns the entire organisation. Without alignment, exit planning becomes fragmented and inefficient. A skilled exit coach facilitates structured planning sessions, strategic offsites and board level discussions to ensure all stakeholders understand the exit roadmap. Finding The Best Exit Strategy Investments The best exit strategy investments are those that strengthen the business’s valuation, streamline operations and increase predictability. When planning your best exit strategy, investment decisions should be evaluated through the lens of what reduces risk and increases future earnings. For 8 figure professional services firms, the highest return areas of investment include: 1. Strengthened Financial Reporting Systems Buyers want clarity. Investing in better reporting tools, forecasting models and KPI dashboards dramatically improves your attractiveness. Clean data accelerates due diligence and increases trust. 2. Leadership and Management Development Exit valuation increases when the business does not rely heavily on the founder. Leadership development, succession planning and role restructuring ensure the company can operate without the owner. 3. Process and Delivery System Documentation Professional services buyers want operational repeatability. Documented workflows, training materials, delivery frameworks and client management processes improve scalability and value. 4. Technology and Automation Automating billing, project tracking, resource planning and client communication systems increases efficiency and reduces risk. Buyers value operational maturity. 5. Increasing Recurring or Retainer Based Revenue Retainers and subscription models increase valuation multiples because they create predictable income streams. 6. Strengthening Client Contracts Multi year agreements, renewal clauses and performance based fee structures secure long term revenue and attract strategic buyers. 7. Margin Improvement Investments Reducing delivery cost, improving utilisation and optimising pricing significantly enhances EBITDA, the core driver of valuation. Each of these investments pays off far more during a sale than they do during normal trading. They reduce perceived buyer risk, improve negotiation confidence and ensure the company withstands the scrutiny of due diligence. Getting Started With Your Exit Strategy Planning Exit strategy planning is the structured blueprint that guides the entire exit process from intention to completion. It aligns financial performance, operational readiness, leadership capability and buyer positioning into one coordinated strategy. Every strong exit strategy planning framework includes; 1. Defining the Owner’s Preferred Exit Route This includes trade sale, private equity, management buyout, employee ownership trust or group merger. Each path has different financial, cultural and operational implications. 2. Building a Three Year Exit Plan A solid plan includes financial forecasting, operational improvement milestones, valuation targets and leadership development. 3. Strengthening Financial Documentation Buyers scrutinise every detail. Clean management accounts, forecasts, working capital models and contract visibility accelerate the process and increase trust. 4. Reducing Founder Dependency Even highly profitable companies lose value if they rely too heavily on the owner. Delegation, leadership team development and process documentation remove this barrier. 5. Understanding Valuation Drivers Professional services firms are valued on EBITDA, recurring revenue, client concentration, delivery capability and intellectual property. 6. Pre Due Diligence Preparation This includes legal documentation, contract reviews, HR compliance, policies, financial control and risk mitigation. 7. Preparing for Cultural Alignment Many deals fail because the seller did not ensure cultural compatibility with the buyer. Early alignment protects staff and preserves service quality. Exit strategy planning is a collaborative process that must involve the CFO, Financial Controller, leadership team and, ideally, an exit coach. Without structured planning, valuation suffers, deal timelines extend and negotiations become stressful and unpredictable. Frequently Asked Questions About Planning Your Best Exit Strategy How far in advance should I begin Planning To Get Your Best Exit Strategy? Most experts recommend beginning three to five years before your intended sale. This gives enough time to strengthen financials, reduce risk and build valuation. Does the type of buyer influence the exit strategy? Yes. Trade buyers, private equity firms and management buyout teams each value different aspects of the business. Planning Your Best Exit Strategy should align with the intended buyer type. What is the biggest mistake owners make during an exit? Rushing the process. Businesses that lack preparation, documentation or predictable performance often receive lower valuations or lose buyers entirely. Business Exit Preparation Business exit preparation with Quantum Results CFO reinforces the importance of readiness, not reaction. The businesses that achieve premium valuations are those that deliberately prepare years in advance, not those that attempt a sprint at the point of sale. Successfully planning your exit strategy is one of the most important strategic decisions you will ever make. With structured planning, strong financial reporting, operational excellence, leadership readiness and strategic investment, you can maximise valuation, reduce negotiation risk and protect the legacy of your business. For professional services firms, early preparation is the key to unlocking a premium exit in a competitive market. When your exit is planned properly, the final chapter becomes your strongest achievement.

Corporate financial planning is an essential foundation for any company that wants to scale with confidence, protect cash flow, and make profitable long term decisions. Professional services firms in particular rely heavily on predictable financial models, accurate forecasting and disciplined resource planning to maintain margins and support consistent delivery. This guide will walk you through every element of corporate financial planning that matters for a leadership team, demonstrating how structured financial discipline enables resilient, scalable growth. By the end of this article you will understand exactly how to build a robust corporate financial planning framework that strengthens your commercial strategy and equips your business for the next decade. To complement this guide, leaders may also wish to explore the role of an outsourced finance director who sits alongside the corporate financial planning team and reinforces business-wide alignment. When these disciplines support each other, the business experiences far greater financial clarity. Understanding the full scope of corporate financial planning allows owners to transform financial data into strategic decisions that improve profitability, reduce uncertainty and create a stronger operational baseline. With the right systems, forecasting models and governance structure, your organisation can significantly outperform competitors who navigate growth based on insight rather than instinct. Corporate Financial Planning And Its Strategic Importance Effective corporate financial planning enables business leaders to make informed decisions that align financial capacity with ambition. It brings structure to growth, clarity to investment choices and discipline to resource allocation. For an 8 figure professional services firm, this is particularly important because margins are often dependent on utilisation rates, delivery efficiency and client lifetime value. Corporate financial planning typically involves long term forecasting, capital budgeting, risk analysis, cash flow strategy, scenario planning and investment prioritisation. When done well, it becomes an integrated framework that guides every major commercial decision. Here is an example relevant to professional services. An IT consultancy is launching a new managed service offering. The marketing team knows what they want to include, and the sales team has an idea of what the market rates are. But the wider business must understand not only the direct delivery costs but also the long term working capital implications, price sensitivity, scaling overheads, and tax structure. Without structured planning, these initiatives often consume cash and damage profit margins. With corporate financial planning, leadership sees the financial trajectory of the service before it is launched. Not only does that make the service profitable from the start but it gives the marketing team a budget and ROAS goals that make sense, and the sales team can be given appropriate targets. "Corporate financial planning is not simply about predicting numbers. It is about designing a financial ecosystem that supports the future state of the business." Planning is far more strategic than operational. Financial planning should shape the way the organisation invests, prices, markets and grows. It should identify potential vulnerabilities before they appear and highlight opportunities before competitors spot them. How Corporate Financial Planning Leads To Scalable Growth Building a robust financial planning structure means supporting scalable growth. For 8 figure companies preparing to grow beyond their current thresholds, this means alignment across multiple layers of the business. A well designed corporate financial planning system connects: Revenue modelling Resource and hiring strategy Operational efficiency targets Margin optimisation Risk management Cash flow stability Capital investment decisions Tax planning Market expansion strategy Each plays a critical role in determining long term profitability. Professional services companies often experience unstable profitability when rapid growth outpaces financial structure. For example, a legal consultancy may win a series of large contracts that require accelerated hiring. Without understanding the short term cash impact, ramp time, and the margin contribution of each engagement, cash flow quickly tightens. Corporate financial planning avoids this by modelling scenarios in advance so that cash flow isn’t crippled by growth. Why Financial Reporting Is Crucial In Corporate Financial Planning Financial reporting plays a central role in corporate financial planning because it communicates the reliable financial intelligence required for strategic decision making. For an 8 figure professional services firm, financial reporting is not simply a regulatory requirement or a series of dull spreadsheets. It is the lens through which leadership understands performance, evaluates risk, measures profitability and identifies where growth is being constrained by operational inefficiency. Strong reporting structures allow leaders to see not only what has happened, but what is likely to happen next. One of the biggest issues scaling firms encounter is that their internal reporting processes have not kept pace with their complexity. For example, a consultancy operating multiple service lines may still be reporting financial results at company level without separating revenue streams, delivery costs or resource utilisation. This blinds leadership to the true profitability of each service and makes strategic decisions far riskier. Robust reporting solves this problem by breaking financial data down into meaningful analysis that highlights margin performance, delivery risk and cash flow trajectory on a granular level. A well designed financial reporting framework includes monthly management accounts, departmental P&L views, project profitability reporting, cash flow statements, rolling forecasts and KPIs that match the firm’s commercial model. For instance, reporting for a digital agency may include metrics such as billable utilisation, recovery rate, average client value and cost of quality issues. These metrics directly influence profitability and therefore sit at the heart of corporate financial planning. The timing and accuracy of reporting are equally important. Many 8 figure companies still rely on slow month end processes that delay strategic decisions. Transforming reporting into a near real time environment enables leadership to respond faster, reduce unnecessary costs and model the financial impact of decisions with greater precision. An outsourced finance director can be brought in specifically to upgrade reporting architecture, streamline processes and improve data accuracy so planning outputs remain reliable. Financial reporting also strengthens governance. Boards expect clear visibility of financial performance, risk and investment requirements. Comprehensive reporting packages provide this visibility while also demonstrating that the business has strong internal controls. This becomes especially important for companies considering private equity investment, sale or management buyout, where reporting quality is scrutinised in due diligence. Finally, financial reporting provides the foundation for forecasting. Forecasts are only as accurate as the data underpinning them. By establishing strong reporting systems, the organisation can build high quality financial models that inform corporate financial planning and provide the leadership team with predictable, measurable, data driven guidance. Accurate forecasts reduce uncertainty, stabilise liquidity and strengthen the business’s ability to scale safely. Financial reporting is not simply a dry output of the finance function. It is the operational intelligence system that powers corporate financial planning, enhances decision quality and gives 8 figure companies the insight they need to grow with confidence. What Are The Financial Controller Functions Within Corporate Financial Planning? The role of a financial controller is often misunderstood, yet it is one of the most important functions supporting corporate financial planning in an 8 figure organisation. While a CFO focuses on strategy, forecasting and commercial decision making, the financial controller ensures the financial engine of the business runs smoothly. They safeguard accuracy, discipline, compliance and operational efficiency across the finance function. For a professional services firm that is scaling rapidly and increasing the complexity of its delivery model, this operational stability is essential. A strong financial controller is responsible for maintaining the integrity of financial data. This includes overseeing bookkeeping accuracy, month end processes, reconciliations, cost controls, revenue recognition rules and payroll accuracy. Professional services firms often face intricate revenue arrangements such as milestone billing, retainers, percentage complete calculations and deferred revenue. If these are not managed correc tly, both cash flow forecasting and profitability reporting become unreliable. The financial controller ensures these data points are handled properly. Their work extends to ensuring that finance processes are efficient and repeatable. Many 8 figure businesses are held back by outdated systems, manual spreadsheets or poorly documented procedures. A financial controller oversees these processes, implements better financial systems and automates time consuming tasks so the finance team becomes more efficient. This operational foundation enables the CFO to focus on strategy, planning and growth rather than being trapped in administrative bottlenecks. The financial controller also plays a crucial role in cash flow stability. While the CFO designs the cash flow strategy, the Controller ensures the organisation adheres to it. This includes overseeing credit control processes, approving spending, managing supplier payments and monitoring cash positions daily or weekly. Professional services firms that depend on timely invoicing and disciplined collections benefit significantly from a Controller who tightens these processes, ensuring that planned liquidity levels are maintained. Internal controls and compliance form another key part of the financial controller’s remit. As companies grow, risk exposure increases. Without proper controls, firms can experience financial leakage, fraudulent activity, inaccurate financial statements or tax compliance issues. Controllers establish robust approval processes, segregation of duties and systematic checks that ensure financial governance remains strong. Crucially, the financial controller supports corporate financial planning by supplying high quality, consistent, timely financial data. They ensure management accounts are accurate, KPIs are correctly calculated, and departmental results reflect reality. This allows the Finance Director, and CFO to build stronger forecasts, analyse trends with precision and give leadership teams reliable planning guidance. In many organisations, the CFO and Financial Controller form a high impact partnership. The CFO leads strategy and planning, while the Controller ensures operational execution. For an 8 figure professional services firm, this partnership can transform financial performance, strengthen reporting structures, improve cash flow, and create predictable, scalable growth. Frequently Asked Questions About Corporate Financial Planning Below are the most common questions from owners of high growth professional services companies. What is the difference between budgeting and corporate financial planning? Budgeting focuses on short term operational expectations. Corporate financial planning focuses on long term strategic direction, investment, risk and decision support. For an 8 figure company, budgeting alone is not sufficient to sustain growth. How far ahead should corporate financial planning look? Most 8 figure businesses use a rolling 3 to 5 year model. This gives enough visibility to guide strategic investments while maintaining flexibility in a changing market. Can planning reduce risk during expansion? Yes. Effective corporate financial planning identifies financial, operational and market risks early. Scenario modelling allows leadership to make controlled, informed decisions about growth pace, hiring strategy and capital allocation. For additional insights into risk frameworks, some leaders refer to external guidance such as CIMA’s risk and finance insights which complement internal planning. What Does Strong Financial Strategy Planning Look Like? Financial strategy planning reflects the broader commercial mindset required to build long term success. Instead of reacting to financial data, strategic planning uses it as the blueprint for organisational progress. A strong financial strategy means: Investments match long term goals Cash flow is protected at all times Risk is measured, not assumed Resource plans align to forecasts Profitability is predictable The leadership team makes decisions with confidence Professional services firms operate in fast moving markets. Without strategic financial planning, growth becomes inconsistent and difficult to maintain. The Pillars of Effective corporate financial planning for 8 Figure Companies To build a thriving, scalable and profitable company, corporate financial planning must sit on strong foundations. Below we explore the pillars that define a fully functioning planning environment. 1. Strategic Forecasting Forecasting is the backbone of corporate financial planning. It helps leadership prepare for market shifts, resource pressures and revenue fluctuations. Professional services companies in particular depend on forecasting to understand pipeline conversion, utilisation and project profitability. A strong forecasting system includes: Rolling 12 month cash flow Three year revenue and margin projection Scenario models for best, likely and worst cases Project based profitability models Hiring and resource ramp models Sensitivity analysis Strategic forecasting ensures the business can withstand volatility while pursuing opportunities. 2. Financial Governance Governance ensures financial discipline. For an 8 figure company, this can include board reporting standards, internal controls, risk frameworks and decision thresholds. Without governance, planning becomes guesswork. Examples in professional services include structured approval processes for pricing deviations, investment thresholds for new hires or capital commitments and systematic contract profitability reviews. 3. Resource Planning and Workforce Strategy Your people are a major financial asset and cost centre. Workforce planning forms a core part of corporate financial planning because it determines margin performance, client delivery capacity and operational scalability. A CFO will typically model: Chargeable versus non chargeable staffing mix Billable utilisation targets Hiring plans aligned to pipeline conversion Cost of delivery per department Leadership development and succession models These elements ensure growth does not outpace capacity. 4. Capital Allocation and Investment Strategy Investment is essential for growth but only when planned properly. Corporate financial planning ensures capital is allocated to the highest return initiatives and prevents poor investment decisions from weakening cash reserves. A professional services firm might invest in new technology, expand into new regions or launch new service lines. Each requires financial modelling and ROI analysis. 5. Risk and Contingency Planning Risk management is a central pillar. Companies with weak planning structures experience unexpected cash pressure, unprofitable projects and uncontrolled overspending. Strong corporate financial planning identifies risks early. Examples of risks professional services firms face: Over hiring Low margin projects Client concentration issues Scope creep Payment delays Market volatility Scenario modelling helps manage these proactively. 6. Long Term Strategic Vision Corporate financial planning aligns the business with long term ambition. Whether preparing for a merger, acquisition, new market entry or leadership transition, financial planning ensures decisions are grounded in reliable forecasts. Extended Guide: Applying corporate financial planning to the Professional Services Sector To make this guide highly practical, below is a more detailed section focused specifically on how corporate financial planning works inside a professional services organisation. Revenue Modelling Revenue is dependent on utilisation, day rates, project mix and client retention. Planning requires deep analysis of delivery capacity, pricing strategy and historic performance. Margin Strengthening Margins fluctuate based on delivery complexity, staffing models and project overruns. Strong planning highlights weak points early and supports proactive optimisation. Cash Flow Control Professional services firms often experience delayed payments. Planning ensures cash reserves and credit facilities are structured appropriately. Operational Efficiency Planning identifies inefficiencies in processes, communication flows and delivery systems. Growth Planning Professional services companies can scale rapidly once infrastructure is aligned with demand. Planning ensures the foundations are solid. Final Thoughts Done well, corporate financial planning creates a stable, predictable and scalable financial environment for 8 figure companies. It strengthens cash flow, guides investment decisions, enhances profitability and provides clarity during uncertainty. For professional services firms, it is one of the most important strategic capabilities a leadership team can develop. Strong financial planning is not an administrative task. It is the core engine of sustainable, intelligent growth.

Finding money in our businesses without having to do very much sounds a little fantastical – but the reality is, it can be done. I’m not talking about chasing unpaid invoices or putting up prices. This money comes through tax savings and government incentives you might not be fully aware of. Working as a Finance Director with numerous 7-figure businesses, I often find thousands of pounds in legitimate tax savings ‘hiding’ in their business accounts. While I’m not employed as their accountant, it’ is my job as a financial strategist to signpost them to ask their accountants the right questions and help them find those savings. Together, we then allocate the money elsewhere to help the business grow further. In addition to tax savings, a good Finance Director will know enough about the HMRC landscape and the government incentives that will free up cash in the business without you having to work harder. What tax savings can a business make? There are different tax savings you can make dependent on whether you are a limited business or a sole trader. Tax laws are also constantly changing, so it’s a good idea to check your figures every year to make sure you’re still within the rules but here are a few ideas to help get you started. Advancing expenditure – Limited Businesses Buying things earlier than planned could reduce your Corporation Tax liability as a limited business. Even if it’s just by a few weeks (from the beginning of the next tax year to the end of the current one), you could get your tax relief a lot sooner. Here are a few things you could bring forward: Buying equipment Advertising and marketing campaigns Website design and software development Although you can get tax relief for payments into company pension schemes, this only qualifies if physical payments are made, rather than being charged to the company’s accounts. Capital allowances – Limited Businesses You can claim capital allowances when you buy assets for your business. Just like advancing expenditure, buying these items earlier could see you get tax relief sooner than planned. In most cases, you’ll receive 100% of the amount you paid. Here’s a quick list of the types of assets you can buy: Equipment – including laptops Machinery Business vehicles – including cars, vans or lorries Trading losses – Limited Businesses These occur when your company’s expenditure is greater than the income you receive. If you find yourself in this situation, you can get tax relief on this loss. There are three ways you can go about this: Set your losses against any other income (for example bank interest) or capital gains in the current tax year Carry them back for up to one year and set against profit made from the previous 12 months’ trade Carry them forward and set against trading profits in future years Extracting profits – Limited Businesses One of the perks you can enjoy as a company director of a limited business, is the ability to pay yourself a combination of salary and dividends. By doing this, you can get substantial savings when it comes to National Insurance Contributions. Company loans – Limited Businesses If you take money out of your business as a director’s loan, you won’t be charged interest on anything with a value of £10,000 or below. However, if you have a director’s loan outstanding at year end, that you do not repay within 9 months of the company year end, you’ll need to pay an S455 charge at 32.5% of the loan balance to HMRC with your Corporation Tax. HMRC have a useful guide to director’s loans and the appropriate actions for each scenario. Rollover relief – Limited Businesses If you decide to sell one of your assets, you could avoid paying Capital Gains Tax if you reinvest the money you receive in something else – known as rollover relief. This only works if you buy your new item within four years of you selling the old one. Research and Development Grants – Limited Businesses R&D tax credits are a corporation tax and therefore only apply to limited businesses. As sole traders are not eligible to pay corporation tax, they do not get the relief. Companies that spend money developing new products, processes or services; or enhancing existing ones, are eligible for R&D tax relief. If you’re spending money on your innovation, you can make an R&D tax credit claim to receive either a cash payment and/or Corporation Tax reduction. Expenses – Limited Businesses and Sole Trader The business expenses that are allowed and can therefore be deducted from your tax bill must be wholly and exclusively for the purpose of running the business. This means that the costs must be incurred while actually performing the business or trying to attract more business. Dual Purpose Expenses – Limited Businesses and Sole Trader dual-purpose expense is an expense which has both a business and a non-business purpose. If you can identify a clear and robust way of measuring the ‘business’ element of an expense, you can get a profit deduction for it. Next steps If you have an accountant, you might now better understand what they are doing with your numbers. You can also now check your tax return and ask the right questions and in doing so, your accountant might be able to apply tax reliefs that will put the money back in your pocket. You might also want to check out my online course, ‘The Profitable Solopreneur’ which includes modules on: Identifying Expenditure in Your Business Dual Purpose Expenses Recording and Repaying Owner Expenses Tracking Categories and Client Reimbursable Expenses “On this module alone, I found £9,000 of unclaimed expenditure in my business which I didn’t even know was there. This had a huge impact because it meant I could start projects that had been put on hold, much sooner than I had thought.” – Michelle (The Profitable Solopreneur Graduate, 2022).  If you want to know more about The Profitable Solopreneur and how it could potentially help you find money in your business, as well as understand your finances far more clearly, then learn more in our Free Resources section!

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