Why Shareholders’ Agreements Matter

When starting a business, shareholders are usually focused on growth, opportunities and achieving shared goals. However, as a company develops, circumstances can change. New investors may join, shareholders may wish to leave, or disagreements may arise.

A well-prepared shareholders’ agreement helps provide clarity by setting out how shareholders will work together, make decisions and deal with changes in ownership. Having these conversations early can help prevent uncertainty and reduce the risk of costly disputes in the future.

What is a shareholders’ agreement?

A shareholders’ agreement is a legal document between the shareholders of a company that outlines how the business will be managed and how important decisions will be made.

It allows shareholders to agree arrangements around ownership, responsibilities, future investment and what happens if someone decides to leave the business.

Ownership and decision-making

A shareholders’ agreement should clearly set out who owns the company and the rights attached to each shareholding. It can also define which decisions can be made by directors and which require shareholder approval, ensuring important decisions are made with the right level of consent.

Share transfers and succession planning

Businesses change over time, and shareholders may leave due to retirement, ill health or personal circumstances. Including clear arrangements for transferring shares can help ensure ownership changes happen smoothly and that existing shareholders have control over who becomes involved in the company.

Resolving disagreements

Even strong business relationships can face challenges. A shareholders’ agreement can include processes for resolving disputes, helping to minimise disruption and provide a clear way forward if disagreements occur.

Protecting the business

If a shareholder leaves, there may be concerns around confidential information or the future use of company knowledge. Appropriate protections can help safeguard the value of the business.

Planning for future growth

As a company grows, additional funding may be required. Shareholders should consider how future investment will be handled and what happens if some shareholders are unable or unwilling to contribute.

It is also important to consider the potential tax implications of ownership structures, particularly where succession planning or a future sale of the business is being considered.

Planning ahead with confidence

A shareholders’ agreement is more than just a documen, it is an opportunity for business owners to discuss their future plans and put clear arrangements in place before challenges arise.

At Quove, we can support you with business and share valuations and help you understand the financial considerations involved. We can also work alongside trusted local solicitors to help ensure your shareholders’ agreement reflects your wishes and protects your business.

If you would like to discuss putting a shareholders’ agreement in place, please get in touch.

Do You Need To Pay Tax On Your Side Hustle?

More and more people are turning their hobbies and skills into extra sources of income, but it is important to understand when this additional income may need to be reported to HMRC.

With wedding season in full swing, some people may be earning extra money by creating wedding stationery, making cakes, photographing events or offering other services. While these activities may start as a hobby, they could become taxable if they generate enough income.

If you earn more than £1,000 from your side hustle during a tax year, you may need to register for Self Assessment and report your income to HMRC.

The £1,000 threshold applies to your total trading income, so if you have more than one side hustle, you will need to combine the income from each activity when checking whether you need to report it.

Selling unwanted personal items is usually unlikely to require reporting. However, if you are buying or making items with the intention of selling them for a profit, or providing services in exchange for payment, HMRC may consider this to be trading income.

If you are unsure whether your side hustle means you need to pay tax, please get in touch. We can help you understand your responsibilities and make sure you are meeting the relevant requirements.

The Government Updates It’s Small Business Plan

The government has published a one-year update to its Small Business Plan, outlining measures to help small and medium-sized businesses start, grow and succeed.

Tackling late payments

The Small Business Protections Bill, introduced in May 2026, aims to tackle late payments through stricter payment terms, mandatory interest on overdue invoices and stronger powers for the Small Business Commissioner.

The report also highlights that the Commissioner recovered £1.5 million in late payments for small businesses over the past year.

Tax and funding

The government says changes introduced through Tax Update 2026 will help reduce administration for businesses. It also confirmed that, as part of Making Tax Digital, all VAT invoices will need to be issued electronically by April 2029.

To improve access to finance, the British Business Bank’s funding has increased, while the Growth Guarantee Scheme and Start Up Loans Programme are both being expanded to support more SMEs.

Apprenticeships

The apprenticeship system is being simplified to make it easier for small businesses in England to recruit apprentices. Eligible employers can also claim the new Youth Jobs Grant, worth £3,000 for each qualifying young person they hire.

Direct Debit Proposed for VAT and PAYE Payment

The government is consulting on plans that could require most VAT-registered businesses and employers to pay their VAT and PAYE bills by Direct Debit.

The aim is to reduce late payments, simplify the payment process and help businesses avoid missed deadlines. While Direct Debit is already available, many businesses currently choose to pay using other electronic methods.

The consultation is seeking feedback on:

• Why businesses use other payment methods.
• The impact mandatory Direct Debit could have, including cash flow and administration.
• Any exceptions or alternative arrangements that may be needed.

The government is also considering incentives and possible penalties to encourage businesses to pay by Direct Debit, including limiting extended payment deadlines to those using the system.

The consultation closes on 16 August 2026, with any changes expected to be considered once responses have been reviewed.

Could National Insurance Gaps Affect Your State Pension?

HMRC is writing to some self-employed individuals whose National Insurance (NI) records may contain gaps that could affect their State Pension.

If you receive a letter, it’s worth checking your position. In some cases, making voluntary NI contributions for missing years could increase your State Pension.

What should you check?

If HMRC contacts you, review your:

• State Pension forecast
• National Insurance record
• Any missing qualifying years

You can do this through your Personal Tax Account on GOV.UK.

Don’t assume you need to pay

Receiving a letter doesn’t automatically mean you should make voluntary contributions. Many people already have enough qualifying years to receive the full State Pension, so paying extra NI may not provide any additional benefit.

Categories: Positive Accountant