He currently makes about £100,000 per year, although he needs £50,000 to survive.

He has two sons 16 and 18 both in full time education. They answer the phone for him from time to time and help with general admin such as invoicing and pricing contracts.

Steven’s wife works part time and earns about £7,000 per year, but also does a bit in the business.

He has an opportunity to buy a yard for his business which will cost him £150,000.

Stephen has about £50k left in cash which he could invest in the yard, he is sure he could borrow through a mortgage for the rest.

He also makes £18,000 profit on the rental of 3 buy to let properties.

His own house has 6 rooms (apart from the kitchen and bathroom), he uses 2 for storage and an office and his mortgage interest and other household costs are £12,000.

He has life assurance with a premium of £100 per month that he pays himself

This restrict the tax on what he earns to 19% and planning needs to be undertaken through tax planning.

Pay the children up to the NI limit as this is cost effective.

Employ his wife through the Ltd company and his two children. Pay Mrs Stephen up to the tax limit as NI is calculable on individual earnings.

We also suggested issuing shares to wife and kids to keep the dividend in the lower tax bracket (not needed in this case but maybe keep to next year).

Claim back a proportion of the rent, as more can be claimed as a Limited company.

Put the income in properties in joint names, with his wife (keeping Stephen out of higher rate tax and allowing him not to fall foul of R24 interest restrictions.)

Claim back or don’t pay as much Payment on account. There is a 21 month delay before companies pay tax when they start.

The payments he used to make on his yard were still allowable in the company for corporation tax relief. The receipt in the SSAS was held in a tax free pension fund, as was any growth in the value of the land.

Rebroke the life assurance policy to relative life, which means the instalment is tax allowable for the company. One insurance company will do this for Critical illness.

Use the £50k cash he has left over plus savings on tax to buy the yard through a SSAS. Stephen loaned the company £50k through his Directors Loan Account to do this, which he can withdraw at any time tax free. This £50k can be used in future years to prevent him going into the higher dividend tax withdrawal bracket.

Claim the proportion of the rent on his home as an office by renting this from time to time to the company. This allows a company owner to charge a proportion of his costs rather than the £6 per week allowed by HMRC as a sole trader.