Corporate financial planning

Effective corporate financial planning can help you to make substantial savings.


Tax savings for companies

There are a few key areas outlined below that every company can benefit from reviewing.

Staff benefits

Reviewing the cost effectiveness of your wage bill, either at performance reviews or when hiring new staff, can result in benefits for the company and employee. There are many products that offer a perceived benefit to the employee that is greater than the cost, for instance:

  • Income protection: where an employee has to be let go due to ill-health, this will ensure income for the employee and reduce strain on the company’s finances.
  • Critical illness insurance: covers employees for a list of serious (but not necessarily fatal) illnesses, providing a lump sum that is typically equal to two years’ salary for the employee.
  • Medical insurance: employees and their suffering from ill-health can be on the mend and back to full productivity faster.
  • Pensions: an employer can set up more attractive group pension schemes than an individual can access, resulting in savings all round.
  • Life insurances: again, group life insurance (often as part of a pension) can be more cost-effective than individual policies, especially for employees with existing medical issues.

We can explain all these options and more, and help you to decide how best to optimise your staff spending.

Director pensionsFinishing Line

Where your company has surplus profit after the directors’ incomes are covered, careful tax planning can be beneficial. Director pensions can go towards reducing corporation tax, income tax and National Insurance, all while creating stability for directors when it comes to retirement.

In the meantime, this private fund can be used for investments in corporate property or to loan money to the company. Any interest payments will then go towards the pensions, rather than into the bank. Come in for a chat about how you can maximise savings.

Key man risks

Key person policies can insure the company against the sudden loss of key members of the team, due to death or disease. Weigh up the potential cost of employees who are not easily replaced, perhaps due to specific technical skills or impressive sales records. This cost can be covered in a key person policy.

Shareholder protectionUmbrella funds

In limited companies, the death of a shareholder or director can wreak havoc on the business’s finances.

Most companies will have clauses in the deeds or articles of association, where the deceased’s share is offered for purchase to the other directors and/or shareholders. This prevents their share from being passed on with their estate, and causing more upheaval within the business.

Where this is the case, a life assurance policy can be arranged for shareholders and directors. With careful planning, this policy may pay out a lump sum to the company, which can be used to ‘buy out’ the deceased. Other shareholder protection options can also cover director’s loan accounts, protecting the company’s liability.

There are many options for life assurance policies and shareholder protection; get in touch to discuss your options.

Arrange an appointment with one of our independent financial advisers TimeMgt

At Martin Aitken Financial Services, we provide free initial advice. Contact us today to discover how your company can make significant savings with effective corporate financial planning. For free initial advice from our experienced financial advisers, contact us on 0141 272 0000 or fill out our online enquiry form.