12th February 2022 | Sunday Business Post

Business advisory and accountancy firm HLB Sheehan Quinn is on hand to offer expert help to companies looking to grow writes Lorraine Courtney.

For owner-managed businesses growth can be complex and risky, said Tax Partner, HLB Sheehan Quinn, Bruce Stanley.

Worse still, many are not skilled or knowledgeable enough about managing the change process without outsourcing some business activities.

“As business look to grow they need to ensure they have the right structures in place, the appropriate resources and are maximising their tax efficiencies,” said Stanley. “The successful entrepreneur is always looking for new opportunities to grow. As a business expands into new areas it becomes necessary to consider the best way to manage that expansion.”

A Holding Company structure has many advantages at this stage in the business life cycle and indeed later on, said Stanley. “Whether the business is branching into new sectors, providing new products or services, or moving into a new geographical area, then it needs to give consideration as to how that expansion will be funded and how to best protect the current business from risks associated with new ventures.”

“The holding company structure allows companies to protect the existing business, create a Special Purpose Vehicle for new ventures, access retained profits in the company tax efficiently for investment in expansion and utilise the goodwill and contacts of the existing business.”

In addition, the holding company structure can be used for asset protection purposes and offers long term tax benefits on the subsequent sale of investment holdings (5% or more).

Stanley said that in a world of increased regulation, compliance and reporting it can be a challenge to stay on top of the administrative aspects of the business. The traditional method of addressing these problems is to hire internally.

“However, the benefits of outsourcing key business activities are now widely recognised and growing in popularity. Today businesses of all sizes can realise the benefits.”

“In many cases, the benefits of outsourcing services are not an optimisation strategy – they’re a necessity. Often the only feasible way to grow a business, launch a product, or manage operations is to delegate certain tasks to an outside supplier.”

Reasons to outsource include cost savings, increased efficiency, it frees you up to concentrate on core activities and to save on infrastructure and technology upgrades. According to Stanley outsourcing also gives a business access to experts and leaner operations.

Tax is a significant expense for all businesses and as with all costs, it is important that the business is paying no more than necessary. “If competitors are availing of a tax relief, lower tax rate, or other tax breaks and you’re not, then you will be at a disadvantage in the marketplace.”

“Tax planning in a business context should consider the short, medium and long-term goals. By doing so, the right structures can be put in place to ensure that those goals are met in the most tax efficient manner.”

Ireland has a broad range of taxes, reliefs and exemptions that should be considered when reviewing your business activities, said Stanley. “Tax planning should take account of the various taxes your business pays, such as tax on profits, VAT and payroll taxes. Examples of matters all businesses should be addressing include what is the effective tax rate, and could it be lower? Are there tax efficient options for investing profits eg green energy products with increased deductions or pensions? Is it possible to avail of the generous Research & Development tax credit scheme? How does the business account for VAT?”

“It is also working looking at if there are any industry specific VAT schemes available and if billing can be managed to reduce the VAT rate charged to clients. Ask yourself if your employees being rewarded in a tax efficient manner that promotes loyalty? Is the right business structure in place for the owner’s ultimate exit?”

There are many ways to manage a company’s tax liabilities, reduce the costs, spread the cashflow burden and protect the trade. “Having an expert review the way a business is taxed can lead to increased savings giving you an edge over competitors,” said Stanley.

HLB Sheehan Quinn provides a range of outsourced services, from payroll and VAT, management accounting, KPI dashboards right up to a full outsourced CFO function. If you’d like to know more about how we can help your business contact Bruce Stanley 01-2915 265 or bstanley@hlbsq.ie