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According to the Institute for Family Business there are currently 4.8 million family-owned businesses, that’s 88% of all enterprises in the UK.
Family run businesses are often negligent when it comes to the little details of running a business. Family members are much more relaxed than standard employees therefore rules and regulations can sometimes slip, no matter how good their intentions.
When it comes to the finances even for a family-owned business it is important to keep on top of the finer details. There is an extra element of risk in a family business for its future however a few small changes to the way things work will help keep them stay on top of things.
One of the biggest sabotages to the success of a family-owned business finance are sympathy towards family members giving them jobs which in turn leads to unnecessary pay rises. When dealing with close relatives it is easy to suddenly justify unnecessary spending but this can be damaging to your business bank balance.
Ignoring the importance of staying tax efficient will leave any family business vulnerable to potential tax liability problem and penalties from HMRC. The best thing to do for both family and business is to stay compliant and play by the rule book! Usually, recruiting a third-party professional to help keep the family business stricter, more pragmatic approach to finances and bookkeeping.
If you’re looking for an experienced accountant to help with the financial running and business development of your family-owned business, give us a call to have a chat about what we can do for you!
I rely on the expertise of Sence Accountancy for all my financial needs - end of year tax return, payroll and business advice.
Kip McGrath Education Centres