Client Profile
Owner-Manager (OM):
Business:
Tech startup specialising in innovative software solutions.
Financial Situation:
Challenges
Objective:
Maximise take-home earnings without complicating the tax plan.
Concerns:
Impact on pension savings and maintaining the same net cost to the company.
Pain Points:
Traditional tax planning is expensive and time-consuming, requiring multiple offline calculations and meetings.
Solutions
Tailored Tax Plan:
Balanced salary and dividends while preserving the net cost to the company the same and pension contributions equivalent to or greater than a salary-only employee.- Annual Net Income Increase: 6% (£4250), from £73,997 to £78,247.
- Annual Pension Savings Increase: 52%, from £3082 to £4675.
Enhanced Plan:
Applied OM + Spouse Booster.- Annual Net Income Increase: 27% £19,692, from £73,997 to £93,689.
- Lump Sum: £41,921 refund from HMRC for overpaid PAYE and NI taxes
Unique Tax Tool:
Our OM Tax Tool eliminates the need for multiple offline calculations and meetings by providing real-time, complex calculations using inputs from Gross Income, Net Income, or Net Cost To Company.
Implementation
Real-time Tax Plan:
Finalised using our OM Tax Tool in one consultation.
Amend Articles:
Specific class of shares and criteria for the spouse to mitigate disguised remuneration by HMRC and plan for business exit.
Payroll Roll-back:
Implemented the tax plan from the beginning of the tax year.
Add Spouse to Payroll.
Set-up Pension Contribution:
Employer-only for consistent monthly savings.
Control and Monitor:
Integrated tax plan within the accounting and bookkeeping system.
Results
Cost-Effective:
More cost-effective implementation using our OM Tax Tool.
Streamlined Processes:
Improved payroll, bookkeeping, and accounting controls.
Increased Net Income:
Dramatic increase in net income and pension savings while maintaining the same net cost to the company.
Tax Efficiency:
Improved by 101% (£21,284, from £21,122 to a negative £162) – Total taxes employee, employer less corporation tax.
Client Testimonial
The tailored tax plan provided by Grieve & Lombard has significantly improved our financial situation. We are now able to manage our debts better and focus on growing our business with less stress.”
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Future Outlook
With the financial stability achieved through our tailored tax plan, the client plans to reinvest in their business, explore new market opportunities, and continue building a robust financial foundation for their family.
Key Metrics Summary
Lump Sum Refund:
£41,921
Tax Efficiency Ratios Net Income:
from £1.29 to £1.00 (for every £1 of net income the net taxes £0.00 on the OM + Spouse Booster)
Problem-Solution-Result Summary
Problem:
High debt, increased cost of living, and cashflow stress.
Solution:
Tailored tax plan balancing salary and dividends, including spouse in the plan.
Result:
Increased personal net income, improved pension savings, and a lump sum refund.