Salary Planning

Salary Planning

Salary Planning
Salary Planning 1

Written by Sebastian Elwell

January 10, 2021

Business owners – what’s the best way to pay yourself?

At Switchfoot Wealth we receive regular referrals from accountants to produce a ‘personal financial plan’.  We help business owners like you to document your personal financial needs, both now and over your lifetime.

The Personal Financial Plan is often the starting point for many complex areas of accountancy and business advice delivered by your accountant, but why do they need to understand your personal financial plan?  And how can Switchfoot Wealth liaise with both you and your accountant to ensure that your personal financial planning is mapping to your business planning and working in harmony?

One key area often mentioned is salary planning.

If you’re a business owner, you need to balance your finances carefully. On one hand, you want your business to be healthy, so re-investing profits into the business rather than taking them out seems like a good idea. On the other hand, you own a business in order to make a living, so you also want to take a salary – in a tax-efficient way.

Are these two options mutually exclusive? Not necessarily. It all depends on the profits your business is making and what sort of lifestyle you want to lead. Generally speaking, the most tax-efficient way to pay yourself is to take a minimum salary of £12,500 and minimum dividends of £2000. However, most business owners want – and need – to see a larger income than that.

There are, in fact, a variety of ways to pay yourself from your business. These include:

  • Salary
  • Dividends
  • Pension contributions
  • Repayment of director loan accounts
  • Electric cars
  • Other benefits such as tax-efficient life cover and flexible benefits packages

 

Working out what is best for you will depend on your business and your specific requirements, which is why it makes sense to work with an independent financial adviser, to develop a personal financial plan.  If you can clearly and concisely articulate how much money you need, when and in what tax wrapper – then your accountant will be in a much better place to advise you and the business about the most efficient way to pay yourself.

How can your business meet your needs?

What business owners really need to know is: “How do I pay myself as tax-efficiently as possible, whilst still meeting my lifestyle needs now and in the future?”

That’s a more complex question, and it’s one of the reasons that savvy business owners turn to independent financial advice. It’s more than thinking about pensions and investments; it’s about looking at your current financial needs – paying the bills, going on holiday, covering school fees – and at what you would like in the future – moving to a bigger house, taking the family on the holiday of a lifetime, affording hobbies and interests and of course funding retirement.

From this, you and your accountant can start to plan how hard your business needs to work for you in order to provide you with the income you need. This is where you start to really link the performance of your business with the benefits you get from it. Your personal income and your business success are inextricably linked, and good financial advice can help you define what you need, and suggest ways in which your business can support those needs.

This is particularly important for people in areas where housing and lifestyle is expensive, such as the areas of Surrey that we work in – the areas surrounding Guildford and Farnham. Independent financial advisors need to be aware of market conditions in the areas they work in; a certain level of income is needed to afford housing, for example.

Working closely with your accountant

This is where your various professional advisers can work together to help you achieve your goals. Your accountant is far more important to your business than just the person who sorts out your end of year accounts and your tax bills. She is the person who can help you make and implement strong business strategies that will give you the business that supports your personal needs.

Bringing together your personal and business financial plans is the obvious way to ensure that you are making the best possible plans for your long-term future.

Tax-efficient financial planning

Of course, all business owners and individuals want to make sure they are tax-efficient. This requires specific planning based on a clear understanding of income, outgoings and needs. This gives you a platform from which you can make plans for your business, ensuring that you are making business decisions that help to support your own financial goals.

Ready to make a start?

If you want to find out how to pay yourself tax-efficiently and meet your financial needs, we start with a detailed analysis of what you need and when – the personal financial plan. We’ll then work together with your accountant to explain your plan so that she can help devise a strategy to meet your needs. Input from all three parties (accountant, financial adviser and business owner) is needed to make your financial plan become a reality.

 

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

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SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Succession Planning

Succession Planning

Succession Planning
Succession Planning 2

Written by Sebastian Elwell

December 28, 2020

Succession Planning 3

Should you be succession planning?

Your business might be relatively new, but you should still be thinking about succession planning. It’s something that often gets left until the last minute – or isn’t done at all – and that can have a significant impact not just on the ongoing success of your business, but also on your family’s personal financial situation.

What is succession planning?

It’s basically a safety net for you, your business and the people who rely on it. Succession planning is often just thought of as ‘who takes over when I retire’ but there are other reasons why your role might need filling. The two most obvious are ill health or death. Neither are tempting subjects, but both could happen at any time – and everyone needs to be prepared for the possibility.

Why is it important?

Your business almost certainly ticks along nicely from day to day. Everyone has their position and role, and they rely on you for leadership, strategy, planning and consistency. It’s amazing how quickly this seemingly ordered existence can fall apart if you are no longer there to steer things. Other relationships in the business may be strained; people who think they should take over the business might be thwarted; and if you’re running a family business, personal relationships can easily get in the way.

That’s why it’s important to take the time to think seriously about what plans and processes would kick in with your business if you were to be incapacitated, take early retirement or need to leave the business for any other reason.

Taking the time to get it right

Your succession plan will depend on whether you are running a family business or a stand-alone business. You might also have to make different plans if you are in a partnership rather than a Limited business. That’s why it’s a good idea to get some independent advice. There are some key things to think about, whatever type of business you run:

  • Get started as soon as possible – the longer you leave it, the more tricky a succession plan may become. Even if you have only recently started your business, it’s worth thinking about your succession plan. It will help to keep your business running.
  • Include key people in the business – there should be no such thing as a secret succession plan. For a family business, talk to the relevant people to be clear about what you want to achieve and sort out who is able or willing to work with you to achieve those goals. And even if it’s not a family business – you will need to bring the right people along with you as you plan.
  • Think about what you want – if you are planning for early retirement, for example, do you still want to be able to take an income out of the business?
  • Have a robust business plan in place – apart from planning early retirement, you’re unlikely to know exactly when your succession plan will be needed. So you need to have a strong and practical business plan in place so that your business is in the best possible position at all times.

It can take a while to sort out a good succession plan. There are many variables to take into account, many people to involve and a potential range of business processes to put into place. At Switchfoot Wealth, we’ll work with your accountant and other advisers to make sure that your personal financial needs and wants are reflected in your succession planning, giving you peace of mind for yourself and your family.

 

 

 

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

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SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Your Financial Freedom Plan

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Your Financial Freedom Plan
Your Financial Freedom Plan 4

Written by Sebastian Elwell

December 13, 2020

Your Financial Freedom Plan 5

Have you got a Financial Freedom plan?

When we speak to business owners about their long-term goals, we often hear the words ‘financial freedom’. Whether that’s paying off the mortgage, having enough pension and investments for early retirement, or being able to fulfil travel and leisure plans, these business owners all have one thing in common: they need the business to provide the funds.

It’s never too early to start planning

We’re firm believers in starting early. That’s because the sooner you start to make a financial plan that includes your business, the more likely you are to realise it. Many people spend their mid-working life devoting hours and hours to their businesses. What you really need is for your business to be devoting pounds and pounds to your bank account.

What is it that you want to achieve?

  • Buy your family’s forever home
  • Be mortgage free by a certain point
  • Take a sabbatical to travel, study or work on another business
  • Undertake a new build or significant renovation project while your business works for you
  • Make more tax-efficient savings and investment plans

How a financial plan can help

For business owners, a personal financial plan should also underpin any business decisions you make. After all, it’s your business that’s going to provide the financial freedom you need. So the two things will always work hand-in-hand, and that means you can take big strides in the growth and management of your business.

A plan will help you see how you can build your business to increase your income, build value for your exit strategy and use the proceeds to give yourself the lifestyle you really want. You can continue to work, of course, but you don’t have to – it’s a choice rather than a necessity.

Protecting yourself and your family

Owning a business is risky – as we’ve seen recently, it doesn’t matter how huge your business is, it can still go to the wall if it meets the wrong set of circumstances. So it makes sense to protect you, your shareholders and your family. Can your business run without you? Who would take over if you had to step aside? How would you meet your financial commitments or your lifestyle goals?

All these things are genuinely important, and too many business owners keep putting discussions to the bottom of the pile. But working on a wider financial plan means you will have the confidence to make key decisions about your business and your personal life. It means you’ll have a clear idea of what comes next and what you need to do. And it means you will be in control, with the backing of independent financial expertise behind you.

So, is this valuable to you?

If you think it would be valuable to create a road-map so that your business is working hard to support your personal financial goals, why not talk to us today? We can start to build your own personal financial plan and we’ll be with you every step of the way.

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

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SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

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Why make the switch to sustainable investing?
Why make the switch to sustainable investing? 6

Written by Sebastian Elwell

November 20, 2020

Sustainable Investing
Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

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SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Why choose a financial adviser who is a STEP member?

Why choose a financial adviser who is a STEP member?

Why choose a financial adviser who is a STEP member?
Why choose a financial adviser who is a STEP member? 7

Written by Sebastian Elwell

November 1, 2020

STEP Advising families across generations

 

Why choose a financial adviser who is a STEP member?

It can be tricky to choose a financial adviser – particularly if you are working through complex financial arrangements, hold a power of attorney, or are making more complicated plans around inheritance and succession planning. It’s obviously important to ensure that the adviser you choose to work with is suitably qualified for the type of financial planning you need, which is why memberships of bodies like STEP and SOLLA are important.

What is STEP?

STEP is the global professional association for practitioners who specialise in family inheritance and succession planning. Members are financial advisers, lawyers, accountants and other professionals who help individuals make the best plans for their future, and the criteria for membership is exacting, so you know that it is worth using someone who has taken the time to become a member. For individuals and families in Farnham for example, Sebastian Elwell from Switchfoot Wealth is the only financial adviser in the area who has STEP membership and a STEP Diploma in Advising Vulnerable Clients*.

Why should I look for a STEP member?

STEP members are experts in helping families plan for the future, often advising two or three generations at the same time, to ensure that everyone has the advice they need for a secure future for themselves, their children and their grandchildren.

In particular, STEP members can advise on inheritance planning, trusts and legacies, long-term care planning and charitable giving. Your advisers can work together – so your financial planning may impact on the conditions of your Will, for example. Or you may want to look at succession or exit planning for your business, and your financial adviser can work alongside your accountant, solicitor and tax specialist to ensure that all requirements are met.

Aligning our values

The STEP values are very clear:

  • Promote professional educational attainment.
  • Act transparently.
  • Uphold professional standards.
  • Serve our members, whatever their professional background, wherever based.
  • Recognise our responsibility to the public interest.

They align well with our own values, which are:

  • Being ethical
  • Being qualified
  • Being independent
  • Being technology smart
  • Being collaborative

As a STEP member, Sebastian must work to the organisation’s values and commit to upholding its high standards of competence and advice. Being a member of STEP means that the clients we give financial advice to in Farnham and the local area can be confident about the standard of advice and planning they receive, and that they are choosing a financial adviser who can work closely and comfortably with your other professional advisers.

You can find out more about STEP and what it means to be a member, or simply contact us today for an initial chat about the plans you need to make and how we can help.

 

*Source STEP Member directory October 2020

https://content.step.org/search/members/?f%5B0%5D=specialism%3AInvestment&f%5B1%5D=city%3AFarnham

Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

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SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Collaboration: Cash Flow Planning & Business LPAs

Collaboration: Cash Flow Planning & Business LPAs

Collaboration: Cash Flow Planning & Business LPAs
Collaboration: Cash Flow Planning & Business LPAs 8

Written by Sebastian Elwell

October 6, 2020

Collaboration: Cash Flow Planning & Business LPAs 9
Switchfoot Wealth Limited Independent Financial Adviser

I started Switchfoot Wealth to offer financial planning that matches the way we live and work today. Using the best technology and offering expertise gained through both formal qualifications and years of working closely with clients, we are bringing financial planning into the 21st century, helping people, businesses and professional advisers make the most of their time and their money.

– Sebastian Ewell

Switchfoot Wealth Founder

Read more about Switchfoot Wealth

Related Articles

Salary Planning

Salary Planning

​ Business owners – what’s the best way to pay yourself? At Switchfoot Wealth we receive regular referrals from accountants to produce a ‘personal financial plan’.  We help business owners like you to document your personal financial needs, both now and over your...

Succession Planning

Succession Planning

Should you be succession planning? Your business might be relatively new, but you should still be thinking about succession planning. It’s something that often gets left until the last minute – or isn’t done at all – and that can have a significant impact not just on...

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Have you got a Financial Freedom plan? When we speak to business owners about their long-term goals, we often hear the words ‘financial freedom’. Whether that’s paying off the mortgage, having enough pension and investments for early retirement, or being able to...

SwitchFoot Wealth Limited is an appointed representative of Sense Network Limited which is authorised and regulated by the Financial Conduct Authority. SwitchFoot Wealth Limited is entered on the Financial Services register (www.fca.org.uk/register) under reference number 808196.
Registered Address: 28 Upper Hale Road, Farnham, Surrey, GU9 0NS. Registered in England & Wales No.: 11220173.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.