Key person protection is a business insuring itself against the financial loss it would suffer if a key person in their business died or were diagnosed with a critical illness.

The policy is owned and paid for by the employer, so any pay out is payable to the employer. A key person is an individual whose skill, knowledge, experience or leadership contributes to the financial success of a business and could be one of a number of people within the business such as the;

• Chairman
• Managing director
• Marketing manager
• Computer specialist
• Sales manager

Anyone whose death could lead to financial loss for the business through:

• Loss of profits
• Having to recruit or train a replacement
• Important business contracts being lost if the key person is not there to maintain relationships

• Customers and suppliers losing confidence in the busines

Why do I need Key Person Protection?

Key Person Protection is designed to pay out a lump sum on the death of the insured key person, during the length of the policy. It is paid as a lump sum and could significantly help the business to recover. The proceeds can be used to help replace lost profit or finding and hiring a replacement.

post by brian

If you would like to consider the possibilities of how your business can benefit from protecting itself against the loss of key people or shareholders please contact me on 0845 303 1144 or email brian@coopercurtis.co.uk to discuss this further. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

Business Loan Protection helps businesses pay an outstanding overdraft, loan or commercial mortgage, should a key person die or be diagnosed with a specified critical illness. 

Why consider Business Loan Protection?

Being unable to repay loans can be a serious problem for a business following the death of a key person. For instance, Director’s loan accounts should be paid off on death – without business loan protection, where would this money come from?

post by Brian

If you would like to consider the possibilities of how your business can benefit from protecting itself against the loss of key people or shareholders please contact me on 0845 303 1144 or email brian@coopercurtis.co.uk to discuss this further. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

 

In the event of a business owner dying or being diagnosed with a terminal illness, share protection can provide a lump sum to the remaining business owners. This means that a lump sum could be used to help purchase the deceased partners/shareholding directors/members interest in the business.

Share Protection allows the remaining partners, shareholding directors or members to remain in control of the business following the death of a business owner.

Why consider Share Protection?

If a business owner dies with no share protection in place his or her share in the business may be passed to their family. This means that the surviving business owners could lose control of a proportion or, in some circumstances, all of the business. The family may choose to become involved in the ongoing running of the business or could even sell their share to a competitor. 

A share protection policy can help avoid these issues. 

As well as retaining control for the surviving shareholders, if set up correctly it can also reduce any potential inheritance tax liabilities that could be created for the family of the deceased by retaining Business Property Relief. 

Post by Brian

If you would like to consider the possibilities of how your business can benefit from protecting itself against the loss of key people or shareholders please contact me on 0845 303 1144 or email brian@coopercurtis.co.uk to discuss this further.  

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

Many clients I work with protect their homes, cars and family however many forget to protect the one thing that provides them with the lifestyle they currently have. Their Business. 

Having the correct protection in place can make sure that in the event that something happens to one of your key employees, shareholders or partners the effect on the business will be minimized. 

There are a variety of options available to help you achieve this:

•    Share Protection
•    Key Person Protection
•    Business Loan Protection

In my next 3 blogs, I will outline these and the reason these should be considered for your business. 

Post by Brian

 

If you would like to consider the possibilities of how your business can benefit from protecting itself against the loss of key people or shareholders please contact me on 0845 303 1144 or email info@coopercurtis.co.uk to discuss this further. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

At first, the idea of giving a role in your organisation to your husband or wife might not seem particularly appealing. Working in such close proximity to your partner, could put a strain on your relationship.

When you begin to take a deeper look into the consequences of such an arrangement however, perhaps it isn’t the worst idea after all…

Clearly, you know the person well, and therefore all the concerns about trust (should) go out the window.

From a financial point-of-view, there are certain benefits that you can achieve through employing a spouse. Let’s take a look at some of them now;

Use up your Tax Allowance!

Almost everyone living in the UK is entitled to an Income Tax Allowance; “the amount of income you can receive each year, without having to pay tax on it”. For the majority of the working public, this figure currently stands at £11,000.

By employing a spouse, you can make sure that your partner is using up all of this non-taxable income. If they do a job for free, pay them! After-all, it’s money going into your household – that isn’t getting taxed. Just think; how much would it cost to employ a non-family member to do the same job?
 
Higher Rate Business – Split your profits

 On a similar note; directors of a business which pays a higher rate of tax can also benefit from taking on a spouse, by making them “more than just an employee.”

If your spouse were to become a shareholder in the company, for example, “you can pay yourselves a mixture of salary/bonuses, benefits, and make use of the £5,000 dividend tax free band, thereby reducing your overall tax bills quite considerably. Not only this, but once more this in more money going into your household.

However, employing a spouse is not as easy as this. Before doing so, you must make sure you are aware of all your duties with regards to the law.
 

Save on National Insurance costs

Rising to £3,000 in April, the employment allowance can be claimed through the payroll giving relief on Employers NI as along as a director only business pays their additional employee more than £8,060.  

Don’t get caught out!

It is important that your spouse is treated like a “normal” employee. Just because you are in a personal relationship with them, it doesn’t mean you can exploit them for your own gain.

The National Minimum Wage rules therefore still apply, and your spouse must actually be paid what they are owed (and are thus affordable to you). Just like with a normal employee, if your spouse is not involved in any other paid employment, a starter checklist form must be filled out.

To avoid any unwelcome visits/checks from HMRC; make sure that your spouse is employed to do a “proper” job within your organisation. 
 

Employing a spouse is a good idea

 All in all, employing a spouse can often be a worthwhile venture for your business. There are many tax benefits (some listed above), that can be realised from doing so.

However, it is essential that if you are thinking about taking on your husband/wife, you do things by-the-book. One quick tip; if you pay them in cash, you may struggle to justify your activities should HMRC come knocking.

Post by Brian

If you would like to find out more information about employing a spouse – or employment in general – check out the payroll section of our website.

Alternatively, get in touch with us at Cooper Curtis today on 0845 303 1144 and we’d be happy to help…

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content. The content was correct at the time it was published. 

Brian looks at how and why you would change your company's year end date. 

There is no straight answer to 'what's the best year end to have' as it depends from company to company. But I have outlined some scenarios where you would consider a change; 

• The main reason for changing your year end is for the purpose of cash-flow and to defer paying corporation tax - Due 9 months and 1 day following a year end, corporation tax could be delayed by extending your year end.

• Or in the opposite scenario, you could decide to shorten your year end if you have a rise in profits, and balance out the CT payments.

• By extending a year end, you could delay a deadline for submitting accounts at companies house. Its currently £150 fine penalty for lateness rising to £1,500 for more than 6 months late!

• To align it to the tax year. By changing it to the end of March, it will make admin easier and also predict any personal tax due. 

• If a company is in a Group a change could be made to align your companies to the same year end for the purpose of reducing admin. 

How often can you switch your company year end?

1. You can shorten your year end as many times as you like,.even by 1 day. In the first year, there must be a minimum of 6 months in the accounting period.
2. You can lengthen your company year end to 18 months, (or more if co. in administration) but a company may only do this once in every 5 years.
3. But be aware, you can only change a company's year end at any time before the 'current accounting year end's' deadline.

Contact Brian on 0845 303 1144 if you wish to discuss your options for changing your year end date. 

         Post by Brian

Our blogs are designed to give you simple,no jargon, easy to read, information. We appreciate you are short on time, so we try to focus on a topic we get asked about frequently from our recruitment clients to give you the facts only.

If there are any blogs that you would like to see from us or would like more information about a particular blog written, please let us know. We also appreciate any feedback on ways to improve our blogs. 

Please note, all our content is for general guideline only, every case is different and we would recommend speaking to us before taking any action as a result of the content.

The content was correct at the time it was published.