Well, that title sounds a bit more sinister than I intended!
You see, I recently completed an End Game Tax Diagnostic Review to check how I’m doing when it comes to my business’s tax efficiency.
Not all of my personal income comes from my role as Founder of Tennick Accountants. I have a commercial building I own personally along with a wider family property portfolio and an investment portfolio that together make up my personal income.
But this leaves me with a sole focus of building up as much value as possible in my accounting business to prepare for the end game. And I’m super invested in the assets, people and clients that make up my business. In particular, I want to achieve the best possible growth for my team so that the future is bright for them.
And one way to make sure I can support this from a tax perspective, as I mentioned earlier is by completing a Tax Diagnostic Review.
So, a Tax Diagnostic Review is an enhanced tax consultancy service that delves deep into all the relevant tax advice opportunities for you and your business. This service is available to all clients, with different options depending on where your business is in its lifecycle.
The End Game Tax Diagnostic Review
I wanted to share with you my experience of completing the End Game Tax Diagnostic Review for myself and Tennick Accountants. The review focuses on the future, the end game, and succession and gives me a full 360 on my tax efficiency!
The review identified many areas to consider, but I’ve selected three areas that are most important to me. These are:
- Succession planning: Passing on the Keys
- Reward & incentivise employees: The Winning’s in the Giving
- Company Share Option Plans: Building my Very Own Team of Superheroes!
Even though the end game is a long way away, I wanted to do this tax diagnostic so I can build on the value of the business and have a clear idea of the most tax-efficient options when the time comes.
Succession Planning: Passing on the Keys
When it comes to this kind of end game, well, let’s just say I’ve done some thinking.
I enjoy my work, but it will be nice to put my feet up in a few (well, many) years. That said, I’d like Tennick Accountants to live on, even without myself at the helm. In other words, they’ll come a time when I’ll be looking to pass on the ‘keys to the castle’ to someone else.
Now I’ve got a pretty clear idea of the most tax-efficient options here, so I can enact my succession plan in the way I want while still being commercial about it.
My personal preference would be to hand over the keys to one of my kids, especially if they really step up and show their commitment to the family business. If that doesn’t work out, I’ve got my eye on a couple of people from within my team with excellent leadership potential.
Then, there’s the altogether different scenario where I’m bought out by a larger accountancy brand, a merging or a sale. I want to be prepared in case this happens too, so I’ve started looking into the various taxation routes I can take there. In a nutshell, my strategy is to prepare for all eventualities.
Employee Rewards & Incentives: The Winning’s in the Giving
Currently, I’m very happy with my team. They’re exceptionally talented and show up every day, giving their 110%.
All that said, I’m always looking for more ways to motivate, reward and incentivise my employees. Sometimes, I just want to show them that I simply care!
The goods news is that when it comes to incentivising employees, there are lots of benefits to choose from. Over the next year, I plan to explore things like a £500 pension allowance, trivial benefits and a cycle to work scheme.
Why the trivial benefits, you ask? Couldn’t you just buy each of your employees a nice scented candle for Christmas? While the pension allowance and cycle scheme might sound like more meaningful benefits, not everyone appreciates them. Remember, every employee is different. Not everyone wants a new bike or even bikes to work.
Through a £50 voucher or a gift for under £50, you can offer a benefit that suits the whole team. It’s a nifty way of motivating your team, or just a nice gift out of the blue. More importantly, it feels a bit more personal than just bunging someone a bit of extra cash…or buying them a scented candle (you know, I never really understood those).
Company Share Option Plans: Building my Very Own Team of Superheroes!
All this talk about ‘The End Game’ reminds me of my favourite superhero franchise (points awarded to anyone who can name it!). Come to think of it, that’s how I really think about my internal team – a group of amazing superhero accountants protecting the assets of our hard-working clients.
In the case where I potentially pass on the business internally, then I’ll want to set up these incredible superheroes with a good company share option plan.
Although I do have a preferred option for succession, I want to plan for any outcome, and one route could be to pass on the business internally. I’ve started by obtaining an advisory report for the most suitable plan for me and the business. Taking this step means I’ll have a complete understanding of exactly how it all works, and I can plan carefully how to introduce shares into the business, should I decide to take this route.
I’m a fan of these schemes, though, as selected employees can benefit tax efficiently from the company’s growth. At the same time, the company remains protected from risk, if for some reason, we didn’t perform as expected. Now that’s some real superhero accounting right there!
Looking to the Future
At some point, there will be scope for an individual tax review when my property portfolio has grown a bit more. At that point, a few other things like CGT and IHT may come into play. But to be honest, this is very much for the future, as the end game is still a long way away for me.
However, there is one thing I “might” consider personally…well for my wife. She’s after a new vehicle, and she may go electric via the business for benefits. I’ve got to admit, my taste in cars is a bit too ‘gas-guzzling for it to be tax-efficient, so it doesn’t really make sense for me to get one via the company.
What’s your end game plan?
Well, there you are, that’s my end game. So what’s yours?
A tax diagnostic can help you identify tax opportunities you may not be aware of, allowing you to plan properly for the future, personally, for your family and business.