Is your business structure still fit for purpose?
As your business grows, its structure may no longer be working in the best way for you.
Even a small amount of business restructuring can bring tax advantages and could boost commercial opportunities.
Reasons to restructure
As a business owner, your first thought probably won’t be to restructure; that’s generally our job as advisors. We often recommend our clients restructure their business as part of a solution to help the business get where it wants to be.
Restructuring can help you reach your end goal which might be growth, succession planning or selling. You might want to organise the business better or take advantage of tax incentives. The changes needed are not always dramatic – so long as things have been done right in the first place.
The right people
Business restructuring can streamline processes and help the business to work better. For example, bringing in a managing director can free up your time to go out and find growth, maybe through new contracts, acquisitions or other means.
Having the right people can also make a business more sellable. A classic issue faced by business owners is that the owner is often seen as the business. Your company will be more attractive if the buyer can see that it can be run without you.
Tax pros and cons
Just be aware though that restructuring may have tax implications as well as knock-on effects for business.
Ring-fencing a particular product line can give protection, prevent dilution of other business areas and make it more appealing to prospective buyers. But it may be disadvantageous tax-wise because your corporation tax thresholds decrease the more companies you set up.
Creating an offshore structure can have tax advantages and suit a business owner’s personal circumstances. But customers and suppliers may not be so keen to deal with a company based offshore.
The best time to restructure your business is well in advance of the change that you want it to support. So begin to plan ahead now.
Find and contact your local Haines Watts office