• Their first action was to advise that the holding company become dormant and the directors’ remuneration be paid by the trading company. Annual tax saving: over £5,000.

• Once there were sufficient distributable reserves they arranged for dividends to be paid to the spouses without any tax liability, having taken into account the relevant anti-avoidance legislation. Annual tax saving: over £25,000.

• As a result of a review by their financial services consultant they were able to reduce the directors’ salary without affecting their pension fund. The directors could then take their dividends in lieu of salary, saving tax and National Insurance. Annual tax saving: over £10,000.

• With profits rising there was a danger of paying corporation tax at large company rate. They suggested that a 51% stake in the overseas distributor be sold to the overseas management. The distributor made minimal profits and as it was dependent on the company’s products there was no loss of effective control. This produced an annual tax saving in the UK, and the gain on sale of the shares was tax free. Annual tax saving: £11,000. One-off tax saving: £10,000.

• They are now helping the directors to implement a five-year plan which will broaden their existing product range and make the company a more attractive proposition for an eventual sale.

If you would like to talk to Haines Watts to find out if they are the right people for you, simply give Gary Heywood a call 01494 452 921 or email gheywood@hwca.com . Telling him you got the idea from HR Advantage will encourage him to sharpen his pencil even more. If you'd like to visit their website you will find the address at http://www.hradvantage.co.uk/our-partners/