Business Financial Planning

In running a successful business you will already be used to forward planning, making sure that your business can adapt and overcome a host of business or competitor scenarios.

There are forms of protection that are specifically designed to help you, your employees and your business itself in a host of different situations.

In the same way that we would look at your personal situation and review the cover that you may require or already have in place, we can offer a similar service to your business. These areas can include:

PARTNERSHIP AND SHAREHOLDER PROTECTION

In the event of a partner or shareholder dying, this protection can provide a sum of money to the remaining partners or shareholders to help purchase the deceased’s interest in the business.  This allows the surviving partners or shareholders to retain control and for the family of the deceased to receive a fair value for the business interest. 

It is also possible to provide the same cover in the event of a critical illness.

 

KEY PERSON PROTECTION

Key person protection provides a financial safety net for the business in the event of a key person suffering a critical illness or dying.  A key person is any employee (including owners) whose loss would have a serious impact on the future of your business.

The benefits of this protection could be used to offset any increased costs, such as hiring temporary staff or recruiting a replacement, or to cover any losses incurred, potentially from the decreased ability to transact business until any successors are trained.

 

LOAN PROTECTION

Loan protection could provide your business with a lump sum that could be used to repay a business loan in the event of the death of a person that is ‘key’ to the business. 

In this situation, a key person is any employee (including owners) whose death would have a serious impact on the business’ ability to repay a loan. 

 

RELEVANT LIFE POLICY

A relevant life policy is a death in service arrangement which provides a lump sum on the death of an employee, within the term of the policy, in a tax efficient manner. The benefit is payable to the employee’s dependants through an appropriate discretionary trust.

Relevant life policies are an alternative to group life schemes for small businesses that do not have enough eligible employees to warrant a group life scheme, or where the directors wish to provide their own death in service benefits without taking out a scheme on all employees.

 

PENSION BENEFITS FOR YOUR EMPLOYEES

A good pension scheme can be an excellent staff motivational tool, which can aid staff retention and mark the employer as someone good to work for. It can improve morale and therefore productivity, as well as attracting the best employees to come and work for the business.

Some employers will make contributions to the pension scheme in addition to the employee’s contributions.  In these situations there are potential tax efficiencies for both the employer and employee.

As with any existing personal pension arrangements, if you already have pension benefits in place for your employees, it is good practice to review these arrangements on a regular basis. Not only should you review the scheme itself but also the administration of the scheme.

Employer provided pension benefits can be a highly motivational tool but, if your employee sees that, for example, a recent pay rise has not been reflected in the employer contributions, this could have the opposite effect.

 

GROUP DEATH IN SERVICE

Many employers wish to ensure that an employee's loved ones will be catered for financially in the event of the employee dying. A death in service scheme is a group life assurance that is intended to pay a lump sum, and/or dependents' pensions, in the event of an employee dying whilst in the service of the company.

This assurance takes advantage of pension legislation to ensure that the lump sum benefit is paid to the family free from inheritance tax.