​The UK’s tax and accounting landscape in 2025 brings challenges for business owners - particularly with increased HMRC scrutiny, rising corporation tax rates, and upcoming Making Tax Digital (MTD) deadlines. These shifts mean it's more important than ever to have proactive financial strategies in place.

Key Risks in 2025:

Corporation tax up to 25% for profits over £250,000;

MTD for Income Tax starting April 2026—early prep needed;

Increased HMRC investigations into small businesses;

Rising costs and tighter cash flow post-inflation and higher interest rates.

Case Study: Managing Risk for a Growing Consultancy

A South London consultancy with £400,000 annual turnover and rising profits was suddenly pushed into the 25% corporation tax bracket. Their records were spreadsheet-based, leaving them unprepared for MTD compliance.

We implemented a cloud accounting system, restructured director remuneration to lower taxable profit, and initiated quarterly tax planning reviews. This not only made them MTD-ready but saved them £12,000 in tax annually, while improving cash flow forecasting.

Advisory Action Plan:

Move to digital accounting systems now;

Review tax efficiency of salary/dividend mix;

Use pension contributions or capital allowances to lower taxable profits;

Schedule quarterly reviews with your accountant.

Worried about 2025 tax changes? Let's build a plan that protects your business and your bottom line.

For real estate businesses considering a management buyout (MBO), an accurate valuation is crucial to ensure a smooth and profitable transition. As a management accountant, we help business owners and their teams assess the true worth of their company and create a viable financial structure for the buyout.

Key steps in business valuation for MBO:

Assessing financial health – Reviewing past financial statements, rental income, asset values, and liabilities to determine a clear financial position.

Choosing a valuation method – Using EBITDA multiples, net asset valuation/ Discounted Cash Flow (DCF) to establish a fair market price.

Structuring the buyout – Identifying financing options such as seller financing, bank loans, or private investors to facilitate the purchase.

Optimising cash flow – Ensuring the business remains profitable post-buyout by restructuring expenses and maximising operational efficiency.

Case Study: A Real Estate Agency’s Successful Buyback

A South London-based real estate agency with £5M in annual revenue wanted its senior management team to take over ownership. We conducted a full valuation using EBITDA and asset-based valuation, placing the business worth at £2.5M. By securing a mix of vendor financing (50%) and private investment (50%), the buyout was structured with minimal upfront cost. Post-buyout, cash flow forecasting and cost restructuring helped the team improve profitability, making the transition seamless.

Considering a management buyout? Get in touch to find out your business value and create a strategic plan!

As businesses grow, their structures often become complex, leading to potential tax inefficiencies. Whether a company consolidates multiple activities into one entity or operates separate stand-alone companies for each division, a lack of strategic tax planning can result in unnecessary liabilities. Our case study explores how we helped a South London-based business restructure its operations, leading to significant tax savings and a more efficient corporate setup.

Our client, a mid-sized consultancy firm, had expanded rapidly over the years, acquiring different business divisions, each with separate revenue streams. Their structure had evolved in an ad hoc manner, with some activities operating under the same legal entity, while others were managed through separate, stand-alone companies. This setup resulted in:

• Higher overall tax liabilities due to inefficient allocation of profits and expenses.
• Increased compliance costs from multiple tax filings and administrative burdens.
• Reduced flexibility for future investment, divestment, or succession planning.

Our team at UMC Accountants conducted an in-depth review of the company’s corporate structure and the shareholders’ ultimate business objectives. We identified two potential restructuring options to optimise tax efficiency:
​

1. Establishing a Group Structure with a Holding Company
   • By forming a holding company that owned various subsidiaries, we enabled the client to legally separate its different business activities while retaining tax efficiencies within the group.
   • This structure facilitated group relief, allowing the transfer of tax losses between profitable and non-profitable entities, reducing the overall tax burden.
   • It provided a legally distinct separation between high-risk and low-risk business activities, improving financial security and protecting shareholder assets.
2. Shareholders Holding Individual Companies Directly
   • For divisions that were potentially saleable in the future, we recommended maintaining them as separate entities without a holding company.
   • This ensured that if a business unit was sold, the shareholders could benefit from Business Asset Disposal Relief (formerly Entrepreneurs' Relief), reducing the Capital Gains Tax (CGT) liability to 10% instead of the standard 20%.

After implementing the restructuring plan:

• The company saved over £50,000 annually in tax through group relief and strategic profit allocation.
• Compliance costs were reduced by 30%, as certain reporting obligations were consolidated.
• The new structure allowed for a future sale of a subsidiary, benefiting from the lower CGT rate.
• Shareholders had increased financial flexibility for reinvestment and estate planning.

Optimising a business structure is essential for minimizing tax inefficiencies, safeguarding assets, and maximising shareholder value. If your business has multiple divisions or operates under a fragmented structure, a professional review could unlock significant tax savings. Contact UMC Accountants today to explore the best structure for your business.