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A recent survey by Capital on Tap revealed that 79 per cent of small business owners do not have an exit plan.

The survey highlighted a mix of reasons behind the lack of preparation for an exit.

Emotional attachment was one of the strongest, with over a third of owners saying they could not imagine letting go of their business.

Others pointed to the difficulty of finding a buyer and the complexity of the legal process.

Why you need an exit plan

Having an exit plan in place allows you to prepare more effectively for an eventual sale, buyout or merger.

It gives you the opportunity to build value in line with your intended departure from the business so you can enjoy a better return.

Equally, life doesn’t always go according to plan. While many of you may not be ready to let go of your business now, illness, stress or sudden personal changes can force your hand at short notice.

The irony is that by trying to hold on too tightly for too long, many owners risk losing control of the outcome altogether and potentially devaluing their company.

Without an exit strategy, you could be left with little bargaining power or, in the worst-case scenario, be forced to close.

Exit strategy options:

Preparing an exit strategy requires careful consideration of all the options available to you:

• Do you want to seek a merger and acquisition transaction with another business?
• Would an Employee Ownership Trust (EOT) appeal to you?
• Have you considered a management buy-in or buy-out?
• Are there family members you would like to be your successor?

It is not safe to assume that a buyer will appear out of nowhere or that your children will want to take over one day.

You need to consider the legacy you want to leave, the financial outcome you hope to achieve and the tax implications of the different exit options.

If you are planning to sell your business, you also need to consider how you will prepare for the sale.

Are your accounts in order? Do you have a strong management team in place? Are there any issues that need fixing before the business goes to market?

Taking the time to plan now can help you achieve the best outcome and leave your business on your terms.

We offer expert services with your exit strategy. Contact us here if you require assistance.

With just six months to go before the first round of Making Tax Digital (MTD) for Income Tax gets rolled out, many sole traders are still not ready.

A survey carried out by IRIS earlier this year found that 45 per cent of UK sole traders felt unprepared for the changes.

That leaves almost half of those affected facing a serious risk of penalties once the rules take effect next year.

Who qualifies for MTD for Income Tax?

From 6 April 2026, anyone who files a Self-Assessment tax return and has gross self-employed and/or property income over £50,000 will be brought into the MTD regime.

The entry point will then reduce in stages, falling to £30,000 from April 2027. It is then planned to fall to £20,000 the following year.

How the penalties work

Think of late submissions as penalty points on a driving licence. One missed quarterly update may not do too much damage, but repeated non-compliance will accumulate into a £200 fine.

Quarterly filers reach that stage at four points, while annual filers get there in just two.

The slate can be wiped clean, but only after a sustained period of meeting every single deadline.

Payment delays are treated under a new aligned system:

• No penalty if tax is paid within 15 days of the due date
• Payments made between day 16 and day 30 attract a penalty of three per cent of the balance outstanding
• By day 30, the penalty increases to six per cent

After 30 days, a second penalty begins to accrue daily at 10 per cent per year until the debt is cleared.

These charges will stop if a Time to Pay arrangement is agreed with HM Revenue and Customs (HMRC).

Additional consequences to be aware of

Besides the penalties for late submissions and payment delays, HMRC can also impose up to a £3,000 fine for failing to maintain adequate records in relation to a return. This includes not maintaining digital records or any issues with digital links within functional compatible software.

They can also issue a £300 minimum fine if you deliberately conceal information needed for HMRC to assess your liability.

Get in touch today to make sure you stay compliant and avoid MTD penalties.