The notion most people have about financial advice is that it is something that is personal. In the sense that it is personal financial advice or financial planning.
However, there is a very strong case to think that businesses also need financial advice and taking this one step further that anyone in business should combine the personal and business financial advice required.
This is accentuated by the fact that directors of companies often have special planning options which only come about given their status as directors.
Here is an example: directors can, in certain circumstances, access Relevant Life Plans.
These are life assurance policies paid for by the Company which pay-out to the family of the director.
Many directors may well have life assurance policies which they pay for themselves, out of their taxed income.
This means they need to extract funds from the Company (which are likely to be taxed on the way out of the Company) which provides them with the amount they need to pay the life assurance premium.
If instead this is changed so that the Company pays for the policy, the effective tax saving can be significant.
This is not available to self-employed people.
Directors can also access specific types of company pension arrangements, includes what are known as SIPPs and SSAS’s, two types of pension which can often be structured very favourably for directors who can control their remuneration and can decide on the right mix of pay between salary, dividends and pension.
Directors can explore using their pension in conjunction with a business need, the most popular idea is to use monies within the pension to buy company premises, which leads to the situation where any rent payable on the premises goes into the pension fund.
Loans can sometimes be arranged within a suitable company pension arrangement.
Another area of combined advice could be in respect of exit planning, which requires a forward looking view of what works for the Company aligned with the individual needs of the company directors (and their families).
In most cases there are various ways of tackling objectives, both personal and business objectives, and there can be big differences – measured in long-term financial outcomes – between the different ways of doing so.
Getting advice which spans the needs of the business and the needs of the directors, rather than isolating them, will often throw up tax saving opportunities and far more efficient results, all round.