Why a robust business succession strategy is vital

STRATEGIC THINKING: HWB Associate Director Gemma Hedges is leading HWB’s seminar Business Succession – Exit Planning Strategies on Wednesday June 22 at Axis Conference Centre, University of Southampton Science Park

How businesses can prepare for the future, succession and exit strategies are the subjects of a free seminar being hosted by Hampshire accountancy firm HWB next month.

Presenting the breakfast event, Business Succession – Exit Planning Strategies, is experienced HWB Associate Director, Gemma Hedges.

Aimed at business owners, directors and shareholders, it takes place from 8am to 10am on Wednesday, June 22 at the Axis Conference Centre on the University of Southampton Science Park in Venture Road, Chilworth and allows attendees the opportunity to network at the beginning and end of the seminar with other businesses and ask any pertinent questions they may have.

The seminar will cover the different ways in which a business can prepare for the future by reviewing the main options for business sale or succession.

These will include a management buy-out, a company purchase of own shares, sale to an employee ownership trusts, gift to future generations and sale to a third party.

According to research by multinational professional services firm PricewaterhouseCoopers for the PwC Global NextGen Survey 2022, 39 per cent of family businesses reported no succession plan in place.

Gemma, a specialist in owner-managed businesses and private client tax, said: “A succession plan is vital for all businesses – it can mean the difference between paying between zero and 45% tax on an exit.

“At the seminar I will be advising attendees how to avoid the many potential pitfalls on the journey towards an exit strategy, many of them quite simple things like the timing of ceasing employment, but the complex legislation is easy to fall foul of and often overlooked until it is too late.

“I will also be emphasising the importance of checking everything is in order within a business at least two years before any succession or sale takes place. Giving yourself enough time to plan in advance can mean significant tax savings.

“When selling or handing over a business you also need to ensure no corners have been cut which might prevent the sale or lead to you receiving less for your shares. Simple things like clearing down director’s loans before starting a sale process can make a big difference.

“At HWB we are currently assisting many owners with succession work as, post-pandemic, many people have re-evaluated their working arrangements, concluded that life is short and decided the time is right to pass down to the family or perhaps just retire a little earlier than planned.

“People are also buying businesses now; it is quite unexpected. Some of our clients are being approached regularly about a sale, sometimes even in order to get stock or staff, both of which are generally currently in short supply.

“All this and more will be covered in the seminar, particularly the fact that it is better to prepare properly in advance than to try to correct the situation afterwards.”

To register for the event go to https://www.hwb-accountants.com/events/ and follow the link.

Chartered accountants HWB, headquartered at Chandler’s Ford, near Southampton, provides business and tax advice.