Author: Glenn

A management buyout keeps the business in familiar hands. The team that already understands customers, systems, and culture steps into ownership, which reduces disruption and protects service quality. For founders, a management buyout allows a planned transition with clear handover milestones and an agreed role after completion if required. This continuity reassures clients, employees, lenders, and suppliers, and helps the company maintain momentum during and after the deal.

Compared with a trade sale, the process is usually more focused and confidential. The buyer group already knows the business, so diligence can be more efficient, with fewer surprises and a smoother negotiation. Pricing can be structured to reflect real performance, for example through staged payments linked to agreed targets, which helps both sides feel that the value is fair and achievable.

Ownership aligns incentives across the team. Managers become investors in outcomes, not only delivery, which encourages sharper decisions on margins, cash flow, and growth priorities. Equity participation helps retain key people and can support a wider share scheme, building a performance culture that rewards contribution. The result is often a more agile business with clear accountability and faster execution.

Funding can be tailored to the business. A mix of bank debt, vendor financing, and private investment can be designed to suit cash generation and risk appetite. Earn outs and warranties can protect both seller and buyer. With the right preparation, including robust management information and tidy legal housekeeping, a management buyout can deliver a clean exit for the owner and a confident new chapter for the team.

SMI loans can help pay mortgage interest for those on benefits, but repayment is due when the home is sold.

Support for Mortgage Interest (SMI) is a government-backed loan provided by the Department for Work and Pensions (DWP) designed to assist homeowners receiving certain benefits in covering the interest on their mortgage or home loans. The loan is intended solely to help with interest payments on a qualifying mortgage or home loan, and repayment is typically not required until the property is sold, or ownership is transferred.

Interest on the loan is charged monthly using compound interest which means that the total amount owed will increase over time. Despite this, the SMI loan may still be a more affordable alternative compared to borrowing from banks or credit unions.

Before applying, individuals are advised to assess their financial situation. SMI may not cover the full mortgage payment and so applicants may still need to pay the remaining balance. Those who have missed payments, are managing other debts, or share ownership with someone not included in their benefit claim should seek professional advice prior to applying.

Eligible applicants may borrow against up to £200,000 of their mortgage if they receive working-age benefits, or £100,000 if they are on Pension Credit, this can increase to £200,000 in certain transitional cases. For joint mortgages, entitlement may be limited. There is no credit check for the SMI loan, so applying will not affect benefits or credit scores.

To apply, individuals must complete an SMI application form. However, it is recommended that they explore all available options first, including discussions with their mortgage lender and support services such as Citizens Advice.

HMRC’s Time to Pay lets eligible taxpayers spread tax bills over time, avoiding immediate enforcement. 

If you owe tax to HMRC, you may be able to set up an online ‘Time to Pay’ payment plan depending on the type of tax debt and your circumstances. For self-assessment, you can create a payment plan online if you’ve filed your latest tax return, owe £30,000 or less, are within 60 days of the deadline and have no other debts or payment plans with HMRC.

For employers’ PAYE contributions, online payment plans are available if you’ve missed a payment deadline, owe £100,000 or less, aim to repay within 12 months and have no other debts with HMRC. Additionally, all due PAYE and Construction Industry Scheme (CIS) submissions must be filed.

If you owe VAT, you could set up a payment plan online if you missed the deadline, owe £100,000 or less, intend to pay within 12 months, have filed all tax returns and the debt relates to an accounting period starting in 2023 or later. Businesses on the Cash Accounting Scheme, Annual Accounting Scheme or those making payments on account are not eligible to set up a plan online.

For Simple Assessment debts, online payment plans are possible if you owe between £32 and £50,000, have no other debts with HMRC, and can pay it off within 36 months.

If you are not eligible for an online plan, you must contact HMRC directly. They will ask for details about your income, expenses, other tax liabilities, and any savings or assets, which they may expect you to use toward your debt.

HMRC will offer taxpayers the option of extra time to pay if they think they genuinely cannot pay in full but will be able to pay in the future. If HMRC do not think that more time will help, then they can require immediate payment of a tax bill and start enforcement action if payment is not forthcoming.

HMRC requires businesses to maintain accurate VAT records to ensure correct tax payments. While all businesses must retain general records (such as invoices, bank statements, and receipts), a key requirement under the Making Tax Digital for VAT initiative is keeping specific VAT records digitally.

Businesses must maintain digital records of VAT charged and paid, including:

• The VAT on all goods and services that are sold (supplies made) and purchased (supplies received).
• The time and value of each supply (excluding VAT).
• Any adjustments made to VAT returns.
• Reverse charge transactions.
• VAT accounting schemes used.
• Daily gross takings when using a retail scheme.
• Items where VAT has been reclaimed for Flat Rate Scheme users.
• Total sales and VAT on those sales for those trading in gold and using the Gold Accounting Scheme.

Digital records must be kept using compatible software or spreadsheets that can connect directly with HMRC systems. Where multiple software tools are used, they must be linked digitally, manual transfer of data or ‘copy and paste’ is not allowed. Digital links can include formulas in spreadsheets, imports/exports of XML or CSV files, or uploading/downloading data.

Businesses must start keeping records from the moment they register for VAT and retain them for at least 6 years (10 years if using certain VAT schemes). Exemptions apply only to specific entities, like government departments or those eligible for an exemption from keeping digital records.

Know the rules for contractors & subs under CIS to avoid issues with HMRC.

Under the Construction Industry Scheme (CIS), HMRC applies specific tax rules to contractors and subcontractors in the construction industry. Contractors are responsible for deducting tax from payments made to subcontractors and forwarding it to HMRC. These deductions act as advance payments toward the subcontractor’s income tax and National Insurance.

A subcontractor is defined as any business or individual that agrees to perform construction operations for another business (a contractor or deemed contractor). This applies whether the work is done directly or through others such as employees or further subcontractors. Notably, a business typically considered a main contractor can be a subcontractor if hired by another contractor, such as a local authority.

Subcontractors can include:

• Companies, public bodies, partnerships and self-employed individuals.
• Labour agencies or staff bureaus that supply or employ workers for construction.
• Foreign businesses performing construction in the UK or its territorial waters.
• Local authorities or public bodies engaged in construction work for others.
• Gang-leaders who agrees with a contractor on the work to be done, and in turn receives payment for the work of the team.

Some businesses function as both contractors and subcontractors, paying others while also being paid for their services. These businesses must follow both sets of CIS rules depending on their role in each transaction.