How we saved a Barkingside retail family business £8,600 through restructuring
Client K runs a Barkingside High Street convenience and off-licence business trading as a Ltd company, with his wife working full-time on the tills and ordering. He took all the dividends while his wife was on a low salary with no shareholding, so the family wasn't using both personal allowances and dividend bands efficiently, and there were no pension contributions.
We rebalanced the structure. We brought the wife in as a 50% shareholder reflecting her genuine full-time role, set both directors' salaries at the NIC-optimal level, split dividends across both personal allowances and basic-rate bands, claimed the Employment Allowance against employer NIC on the other staff, and set up employer pension contributions for both as a tax-efficient extraction. We also reviewed the VAT treatment of the mixed grocery and alcohol stock.