Corporate Services

Pension Reform - Your Obligations

All employers are required to auto-enrol all eligible employees into a Qualifying Workplace Pension Scheme. As a company director or business owner, it’s your obligation to understand which schemes qualify, the processes involved, how they’re structured and the regulations you must comply with.

Since April 2019, employer contributions have been a minimum of 3%. Member contributions are at least 5% (this includes 1% rate tax relief). This gives a total pension contribution of 8%.

We will work with you to ensure that you are fully compliant and that you have a solid understanding of your obligations.

Why act now?

• Your existing scheme might be poor value or might be unfit for purpose. You might need to change it or make it more efficient.
• Budgeting in advance will allow you to prepare for and minimise costs.
• Strategic Planning will let you find the best solution for your staff.
• Employee communication – they need to know what’s going on.
• Consider Salary Exchange – it could save you money.
• Making sure you meet your regulatory requirements can protect you from penalties of up to £10,000 per day for larger companies.
  
  

There are plenty of solutions available, and it is important to understand that the most obvious one might not be the right one for your business.

Automatic enrolment is much more complex than VAT or standard tax returns and the penalties are much greater. We can help you with this. Contact us to talk through your pensions needs.

The value of a pension will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Corporate Planning

Having the right insurance, and plan, in place will protect your business should the worst happen to a key director or employee. Unplanned resource gaps can have far-reaching or even disastrous consequences.

None of us like to think about these kinds of issues, but when something happens in your business, that’s beyond your control, negative impacts can include:

• Loss of profits
• Recall of loans
• Reduced capacity and productivity
• Loss of key clients/contacts
• Reduced practical know-how.
  
  

When you’re reviewing your business plan, it’s vital that you consider insurance that can mitigate the impact of a sudden change to your key operating staff.

As part of our corporate service, we will undertake an in-depth review of your business. We will then work with you to put in place a tailored insurance programme to help protect your business from a wide range of risks.

The value of a pension will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Shareholders

Whether you’re the only shareholder or one of many, the focus is always on maximising profits. But, what if something unexpected happened to you, would your beneficiaries share the same business goals?

If you are one of several shareholders, your fellow shareholders might have to work with partners who have little interest in the business. Or your beneficiaries could find themselves owning shares that nobody is prepared to buy.

That’s why succession planning is so vital for any business. We will explore what you need and review ways that your fellow shareholders would have the means to buy your shares so your beneficiaries can realise the full market value of your shareholding.

This is known as share purchase assurance. It’s an element of succession planning that deals with the purchase and sale of shares following the death of a shareholder.

This ensures that surviving directors can receive your shares when you die and keep the business going without external or inexperienced shareholders getting involved. Your estate will also receive a cash sum for the value of those shares.

There are lots of issues to consider when deciding whether share purchase assurance is needed – including how it should be structured. We can help you create a holistic overview of your business and ensure that you have the right insurance, strategies and processes in place that will enable your business to continue in the event of your death.

The value of a pension will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Employee Benefits

Recruiting and keeping the best talent for your business is getting more complex and employees are expanding the list of benefits they want.

We provide services that will help you lay out a cost-effective strategy that will fit with your plans, and your budget.

You’ll have access to advice from a range of providers, carefully selected and monitored by SJP.

This includes advice on:

• Online statements – helping employees to understand and appreciate the cost of the benefits you provide.
• Flexible benefits – letting employees create a benefits package that meets their individual needs.
• Salary-sacrifice arrangements – helping employees to access tax-efficient benefits while reducing National Insurance costs.
• Private medical insurance – for your employees' health and wellbeing, reducing absence from work while waiting for treatment.
  
  

Group Life, Income Protection and Critical Illness

This type of coverage is essential both for your business and the employee. They will allow you to manage your business during crisis more effectively by:

• Giving you the means to financially support your employees and their families at a particularly difficult time.
• Allowing you to recruit temporary employees.
• Providing access to a range of rehabilitation services, employee assistance programmes and absence management services.
  
  

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Corporate Pensions

Supporting the financial wellbeing of yourself, your family, your business, and employees is important for every business owner.

There are a lot of options when it comes to setting up pension plans, such as:

• Group pension plans for colleagues and employees. These are an attractive recruitment tool as well as a justifiable business expense.
• Salary-sacrifice arrangements that provide cost-effective pension planning opportunities for employees, while reducing employer National Insurance costs.
• Executive pension arrangements, enabling you and your family to reap the rewards from the success of your business.
• Cost-effective trustee-based arrangements that transfer scheme liability to a new pension arrangement, securing employee pension rights.
  
  

As you can imagine, some of these options are complex, so we take our time to fully understand your needs before recommending a solution that will enable you to create the perfect plan for you and your business.

The value of a pension will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount initially invested.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Tax Mitigation

None of us want to pay more tax than is necessary and it’s surprising how many tax savings go unclaimed because business owners don’t know about them. We can help you understand how to reduce Corporation Tax liability. These are acceptable tax mitigation steps, not illegal tax evasion. Some of the main points to consider are:

Company pension contributions

Making pension contributions is one of the most effective pieces of tax-efficient planning a company can undertake. The contributions a company makes to a pension scheme are usually fully deductible on the balance sheet.

Remuneration

Are you maximising dividends and minimizing your salary so you can still claim state benefits and but reduce your income tax liability? Dividends don’t attract National Insurance contributions and have no tax consequences for your company.

Claiming Allowances

There are a host of available allowances that can help reduce Corporation Tax. Research and Development is one of the most commonly overlooked or partly claimed along with capital allowances. Our expert team will ensure you are aware of every available allowance so you mitigate your tax burden. If you don’t know what you can claim, it’s worth getting expert advice here to make sure you receive all the allowances you’re entitled to.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up.  You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Exit Strategy

No matter how much you love your business and can’t imagine leaving it, there comes a time when you have to. Age, health, or a change in circumstances, or a combination of all of those things. Having an exit strategy in place means that you can plan for and maximise the value you have in your business. Many company owners throw away the value of their business and many of the rewards that come along with that, simply because they failed to fully consider how they will exit – both financially and as a leader.

Developing an exit strategy can have a surprisingly positive impact on a business – even if your exit is decades away. Shifting how you hire, train and structure the business and the benefits surrounding it, will dramatically affect your efficiency in the short, medium and the long term and make your exit relatively painless.

You’ll need to concentrate on the following key areas to ensure a smooth exit:

• Aim for a year-on-year increase in profits – reducing profits to cut Corporation Tax liabilities may make short-term sense, but it could harm your business’s perceived value.
• Ensure your accounts are in order and up to date, giving a true picture of the business. It pays to be ready for any due diligence that may be needed later.
• Look to expand your range of customers and suppliers – over-reliance on a few key customers will undermine your business’s value.
• Aim to tie key customers, suppliers, staff and managers to long-term contracts.
• Maximise your relief for Capital Gains Tax (CGT) – you might be able to claim entrepreneurs’ relief, which reduces the effective rate of CGT.
• Consider avoiding substantial holdings in property, shares or leaving money in the bank, which may disqualify you from this relief.
  
  

Our team of highly trained and business savvy advisers will help you develop a plan with all the proper insurances and protection in place to make your business stronger today and well into the future.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Please note that advice on exit strategy planning might involve the referral to a service that is separate and distinct to those offered by us.