Your business structure is a
decision, not an accident.
Most businesses start as whatever was simplest to set up and never revisit the question. As you grow, the structure that was easy becomes expensive.
You set up a company because your accountant told you to. Have you questioned it since?
You incorporated because someone said it would save you tax. Or you're still a sole trader because you never got around to changing. You started a partnership with a handshake and never formalised it. Your property sits in personal names because that's how you bought it ten years ago. None of these were bad decisions at the time. But your business has changed since then.
The wrong structure costs you real money. You pay more tax than you need to. You're personally exposed to liabilities that could be ring-fenced. Succession is harder than it needs to be because the legal structure doesn't match how the business actually operates. And the longer you leave it, the more expensive restructuring becomes because assets have grown, tax reliefs have changed, and unwinding the current structure gets more complicated every year.
Restructuring isn't dramatic corporate surgery. It's sitting down, looking at what you have now, working out what structure would be optimal, and modelling whether the cost of changing is worth the saving. Sometimes it is. Sometimes it isn't. Either way, you should know the answer.
What restructuring actually means at S&J
Practical, tax-driven restructuring advice for owner-managed businesses. Not Big Four corporate M&A.
Incorporation analysis
Sole trader to limited company. We model the actual tax saving across NI, corporation tax vs income tax and dividend extraction, then factor in the costs: accounting fees, Companies House obligations and loss of simplicity. You get a number, not a sales pitch.
Group structure planning
When a holding company makes sense for asset protection, tax efficiency, or managing multiple trading companies. When it doesn't make sense: if you only have one company and no significant assets to protect. We'll tell you either way.
Partnership to LLP conversion
Liability protection without losing partnership flexibility. LLPs give you the corporate veil of a limited company while keeping the tax transparency of a partnership. The conversion process is straightforward; the planning around profit-sharing agreements is where the real work happens.
Property portfolio incorporation
Section 24 has made mortgage interest relief painful for higher-rate taxpayer landlords. Incorporating your portfolio can fix that, but SDLT on the transfer, CGT on the disposal, and refinancing costs can wipe out years of tax savings. We model the full picture before you commit.
Business demerger advice
Splitting a business into separate entities for different growth paths, risk profiles, or ownership structures. One part of the business is high-growth and needs investment. The other is stable and cash-generative. Keeping them in one company forces compromises that help neither.
Succession and exit structuring
Make your business sellable or transferable with the right legal structure in place. Buyers want clean entities, clear ownership, and predictable tax consequences. We restructure now so you're not scrambling when an offer appears or retirement arrives.
When to restructure (and when not to).
Sole trader vs limited company: the real numbers
The headline saving from incorporation is National Insurance. A sole trader pays Class 2 and Class 4 NI on all profits. A director of a limited company pays employee NI only on their salary; dividends above the allowance are taxed at lower rates than employment income. On profits of around £50,000, incorporation typically saves between £3,000 and £5,000 per year in tax. But that's the gross number. You also need to factor in higher accounting fees (statutory accounts, confirmation statements, corporation tax returns on top of personal tax), the loss of trading income simplicity, and the fact that extracting all profits as salary and dividends isn't always tax-efficient. Below about £30,000 profit, incorporation rarely makes sense. Above £50,000, it almost always does. Between those numbers, it depends on your specific circumstances, which is why we model it rather than guess.
When a holding company actually makes sense
A holding company sits above your trading company and owns the shares. It's useful when you have significant assets, such as property, cash reserves and investments, that you want to protect from the risks of the trading business. If the trading company faces a lawsuit or goes insolvent, assets in the holding company are protected. It also makes sense when you have multiple trading companies, because the holding company can receive dividends from each without further tax (under the substantial shareholdings exemption) and redistribute cash where it's needed. What it doesn't do is save you tax on day-to-day profits. If you have one trading company and no significant assets to protect, a holding company adds complexity and accounting costs for no real benefit. We see clients who've been sold a group structure they don't need. Don't be one of them.
The cost of restructuring: know what you're paying before you commit
Restructuring isn't free. Incorporating a property portfolio can trigger Stamp Duty Land Tax on the market value of the properties being transferred (though incorporation relief can apply in some cases). Converting from sole trader to limited company may trigger a Capital Gains Tax charge on goodwill. Setting up a group structure involves legal fees for share transfers, new articles of association, and shareholder agreements. Companies House charges filing fees. Your accountant charges for the additional compliance work. None of this should stop you restructuring if the numbers work, but you need to know the upfront cost and compare it against the annual saving. If restructuring saves you £8,000 a year in tax but costs £15,000 to implement, you break even in under two years. If it saves £2,000 a year and costs £15,000, that's a seven-year payback. We lay out both sides before you decide.
Restructuring for succession: what buyers actually want to see
If you're planning to sell your business or pass it on, the legal structure matters more than most owners realise. Buyers prefer share sales over asset sales because of the tax treatment. Business Asset Disposal Relief (formerly Entrepreneurs' Relief) gives a 10% CGT rate on qualifying share disposals up to the lifetime limit. But your company needs to qualify: it must be a trading company (not an investment company), you need to have held shares for at least two years, and you need to be an officer or employee. If your business mixes trading and investment activities (for example, you own your premises through the same company), you may need to demerge the property into a separate entity before a sale. Earn-out structures, where part of the sale price depends on future performance, also need careful structuring to avoid unfavourable tax treatment. Getting this right two or three years before a sale is straightforward. Trying to restructure in the middle of a transaction is expensive and sometimes impossible.
How Financial IQ helps model restructuring decisions
Financial IQ is our live dashboard that sits on top of your Xero data. When we're advising on restructuring, we use it to run scenarios against your actual numbers, not theoretical examples. Want to see what your tax position would look like as a limited company versus a sole trader? We model both using your real income, expenses, and profit figures. Considering a group structure? We show you the inter-company dividend flows, the additional compliance costs, and the net benefit after accounting fees. Thinking about incorporating your property portfolio? We calculate the SDLT exposure, the CGT on disposal, the annual tax saving from claiming mortgage interest as a corporation tax deduction, and the break-even point. You see the numbers before you commit. No guesswork, no theoretical savings that evaporate when you look at the detail.
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Frequently asked questions
What clients ask before they restructure.
How do I know if my current business structure is costing me money?
The simplest test: if your profits have grown significantly since you set up your business but you've never reviewed the structure, there's almost certainly a saving available. A sole trader earning over £50,000 is usually better off as a limited company. A landlord paying higher-rate tax on rental income should be modelling incorporation. A partnership without an LLP agreement is carrying unnecessary personal liability. We can review your current position in a single meeting and tell you whether restructuring is worth pursuing.
How long does restructuring take?
It depends on what's changing. Incorporating a sole trader business can be done in a few weeks. Setting up a holding company and transferring shares takes one to two months, including legal work. Incorporating a property portfolio is more involved, typically taking two to four months because of SDLT filings, land registry transfers, and mortgage lender approvals. We give you a timeline upfront so you know what to expect.
Will I need a solicitor as well as an accountant?
Usually, yes. We handle the tax modelling, financial analysis, and Companies House filings. A solicitor handles share purchase agreements, articles of association, property transfers, and any contracts that need updating. We work with several law firms and can recommend one, or we're happy to work alongside your existing solicitor.
Can I restructure mid-year or do I need to wait until my year end?
You can restructure at any point, but timing matters for tax. Incorporating on the first day of a new tax year gives you a clean break. Transferring property mid-year means splitting income between the old and new structure. We'll advise on the optimal timing based on your specific situation; sometimes waiting three months saves thousands in tax.
What happens to my existing contracts and bank accounts?
New entities need new bank accounts, and contracts technically need to be novated (transferred) to the new entity. In practice, most suppliers and customers are relaxed about this: you write to them and they update their records. Bank accounts for new companies can usually be opened within a week. HMRC registrations (VAT, PAYE, corporation tax) need to be set up for the new entity, which we handle as part of the restructuring process.
What if the numbers don't support restructuring?
Then we tell you that, and you don't restructure. We're not going to recommend a change that costs more than it saves just to generate fees. If your current structure is already optimal, that's a good outcome because you've confirmed you're not leaving money on the table, and you can revisit the question in a couple of years when your circumstances may have changed.