It’s long overdue but, finally, the HMRC allowable mileage rate has been increased from 45p per mile to 55p per mile (for the first 10,000 miles per tax year). This change has been backdated to April.
All other mileage rates are unchanged.
How to prepare your business for sale
I don’t know about you but I hope to retire some day. I’m not in a hurry as I love what I do but I thought I’d share some of the factors that helped me to obtain 32% MORE than average on the sale of my second business. (My first business was a small partnership with a friend that we wound up amicably when I returned to the UK)
Yes, buyers will look at the profitability but there’s more beyond that so here’s a checklist for you to work on. The difference between and average and a premium valuation often depends on preparation.
1.Stable revenue and profit trends – stability is often better than erratic growth. The new owners want to know how much profit they will be able to generate. Clean, well-organised accounts – these give an impression that the whole business is well run. EBITDA is more than a buzzword, it’s an adjusted profit measurement that allows buyers to compare like with like when looking at different businesses
2.Minimise risk for the new owner – reduce risk leads to higher multiples. Assured future revenue through contracts, retainers, subscriptions, and repeat customers will guarantee the new owner their first income. This assured revenue also gives confidence over future cashflow
3.Diverse customer base. A big ‘name’ may sound impressive but they may be at higher margins and/or the business may be overly dependent on them. Risk concentration is a concern for prospective buyers. Diversified income streams (customers and products) increase stability and confidence
4.Strong brand and market position. Brand recognition and reputation will continue to attract customers to your business in the future. If you have a niche it may be easier to stand out as a specialist. Identify any competitive advantages that you have in terms of USP and intellectual property. A trusted brand will often receive a premium offer.
5.Documented systems and processes – these will help the business to run smoothly without you making the transition easier for the new owner will also increase the value of your business
6.Reduced dependence on the owner. If the business is dependent on you to continue running then it may well collapse without you and so will be valueless to the new owner. Start your retirement now. Ensure that others in your team have knowledge of operations and sales as well as customer and other business relationships. It is important to delegate to your team.
7.Experienced and reliable team – they will keep the business running day to day when you have exited. Retention of employees post-sale is often desirable for the new owner so ensure that the buyer is aligned with your key team. This will reduce operational risk for the buyer (as well as looking after the team who have served you well)
8.Potential – Buyers will pay for potential growth and scalability. Ensure that you have up to date, scalable systems in place (this is where many retiring accountants fail to prepare leaving the new buyer with too much work to do). Identify untapped markets, new products, and expansion opportunities
9.Clean compliance position. Ensure that all contracts, licences, insurance, etc are in order and settle any outstanding disputes or liabilities
10.Clear exit preparation and timing – spend 1-5 years preparing* in advance of the sale by improving financial metrics and reducing risk.
Increasing the value of your business is not just about increasing profit but also reducing risk and proving that profits are sustainable. Put yourself in the position of the buyer. Small improvements can often significantly increase sale price.
*Warning – when Della has coached business owners to prepare their business for sale two thirds of them have liked the new business so much that they have deferred their retirement!
Tax efficient salary
For many years it used to be more tax efficient for director shareholders to take low salary and high dividends but things have changed.
Over the last 3 years the optimal salary/dividend policy has changed because:
- Higher corporation tax rate of 25% introduced with a marginal rate of 26.5% 1 April 2023
- Dividend tax free band reduced to £500 2024/25
- Employer NI starting point reduced to £5000 2025/26
- Employment allowance increased to £10500 2026/27
- Dividend tax rates increased to 10.75%-39.35% 2026/27
It keeps us accountants on our toes revamping all our models each year!
She made me cry
Last week at Accountex somebody made me cry.
I was heading into the restaurant in my hotel for a quiet dinner and somebody recognised me and followed me in. With minor celebrity status (more Z list than A list) in the accountancy world I’m used to people stopping me because they’ve read one of my books or seen me speak.
This time they wanted to thank me for an encouraging comment that I had made when she first set up her business in 2019. A single comment that I made to a stranger and she still remembered it 7 years later. Words really do have power!
As an author I love the precision of words and deliberately dwell on the exact vocabulary to express my meaning as accurately and concisely as possible. But I’m not so careful when I’m just chatting, in person or on social media, as those words are very much ‘in the moment’.
As a mother I was aware of the way that words can build up or tear down my children. Usually after I’ve said the wrong thing!
As a boss I need to remember to take time to thank my team for the good job that they do looking after me and our clients. I’m often busy and just spit out instructions without thinking of the human impact.
We use words in our marketing all the time and our tone of voice, as well as the words themselves, allow readers to imagine themselves working with us … or not.
So, today, I encourage you to look at the words that you use. In seven years time will somebody be thanking you or recovering from a damaging throw away comment that you have made while feeling stressed about something completely unrelated?
Keep your bookkeeping up to date!
This is the single biggest thing that you can do to minimise tax and penalties. If your records are up to date you will:
- know when you need to VAT register so no late registration penalties
- know how much tax you are likely to need to pay so you can squirrel it away long before the due date so no late payment penalties
- know how much profit after tax is available to take as dividends so no penalty tax on overdrawn directors’ loan accounts (DLA)
- have up to date information to ask your accountant for advice before you make any major business (or life) decisions
Frankly, I’m sick of being asked to help directors out of a hole long after the time has passed for action. Whilst I might sympathise, I can do much more if provided with basic information and consulted early rather than having to refer clients to HMRC for a Time to Pay arrangement after the event when we are finally given information to START preparing the accounts.
How to grow your business using social media
With over 30,000 connections social media is a large part of our marketing.
If you’re still growing your online presence here are a few tips:
- Choose the right platform for your audience I grew my first accountancy practice using Twitter. My audience is no longer there and posting short videos and other content on Instagram is now our best source of leads for Minerva Accountants. On the other hand LinkedIn and Facebook are best for my international coaching business.
- Creating engaging and shareable content for your audience might sound like a no-brainer but there is a lot of content that I just scroll past on my busy timeline
- Use visuals to enhance your posts. I’m happy to do face to camera and try to remember to take pictures wherever I go. The fabulous Kate is the truly creative one and uses these and Canva to make something engaging.
- Interact with your followers regularly, don’t just automate your posting and leave it at that. Although we do this on some more minor channels it is important that you engage with your connections as real people and not just as an audience. This helps to build better relationships. #IJustChat
- Analyse social media metrics to improve your strategy. This is something else that falls on Kate and she tells me what sort of content I need to be putting out there based on what you really react to. Otherwise it’s just shouting into the void.
Do feel free to connect with me on most social media as Della Hudson FCA and/or Minerva Accountants
Minerva Momentum Review
To keep your business moving forwards (without the faff).
The Minerva Momentum Review is a sharp, monthly business check‑in for owners who want progress, not another report they’ll never read.
In 30 minutes we boil your business down to one page:
- 3 key numbers that actually matter
- What’s going well, what needs attention, and what’s quietly shouting for help
- Clear actions, with names next to them (because things only get done when someone owns them)
No jargon. No waffle. No 40‑page management accounts destined for a drawer.
This review keeps you focused, accountable, and looking forwards, not just backwards at last month’s numbers. It’s structured enough to be useful, relaxed enough to be human, and designed to keep momentum going month after month.
Think of it as a regular business MOT; quick, practical, and far cheaper than fixing things once they’ve broken.
One page. Three KPIs. Clear actions. Real movement.
Contact to book yours.
How to improve profitability without cutting costs
1.Increase average order value – cross sell to existing clients. What else do you offer that they could use? (This could be the case for business advice sessions or our monthly Minerva Momentum Reviews)
2.Improve client retention – it is always cheaper and easier to retain your existing clients than to go out and win new ones. Stop the leaks before you try to fill the bucket.
3.Upsell to existing clients – who has grown and is now in a position to upgrade and take on a new level of service?
4.Reduce scope creep – be clear on what is included in your contracts. Anything extra should be charged BUT make clients aware of this beforehand so they don’t get any nasty surprise. Every request for extra work should be greeted by “Yes and … that will cost £X”
5.Improving operational efficiency – with so much technology and AI around there is plenty of opportunity to improve your internal efficiencies allowing you to take on more work without impacting on your existing clients.
6.Pricing strategy tweaks – don’t forget that increasing prices is the single most effective way of increasing your profitability (but do make sure that you’re still providing sufficient value)
How do you know when it’s time to hire your first manager?
You’ll probably hire your first manager when your team reaches 5-8 people. It’s at this level that communication starts to breakdown with too many direct communication lines and you may run out of time to train more junior members of the team
As a rule of thumb, if you’re spending more than 1/3 of your time managing your team, answering questions, reviewing work, chasing updates, or managing issues then you would be better off employing a manager. Whilst you will have to cover an additional salary you will also free up your valuable time. It will also mean that you have the right person in place BEFORE to accommodate further growth.
If you’re becoming the bottleneck because everything needs your approval then it may be time to find the right person to delegate to. A good manager should make 80%+ of decisions independently and you won’t need to handle questions from the rest of the team.
Your first manager should be hands on and comfortable doing the work AND managing the team. They should also be a good communicator to liaise with both the team and yourself.
You will then be freed up to move to deciding the direction of your business while your new manager will ensure that everybody on board is pulling in that same direction. As you move away from the day to day you will also have a clearer view of your business which will enable you to lead it better.
Free bookkeeping sessions!
I’m delighted to announce that Zoho Books are sponsoring me to run quarterly bookkeeping advice sessions for them. With the introduction of MTD more small businesses are doing their own bookkeeping. Each session will start with a webinar and advice on what you can claim and there will be plenty of time for you to ask questions.
➡️ Find out more here.