Top 5 Mistakes DIY Business Owner Investors Make (and How to Avoid Them)

Running your own business is tough.

You wear multiple hats—CEO, HR manager, IT support, marketing manager—sometimes even barista! So it’s not surprising that many business owners also try to take charge of their own finances and investments. After all, if you can build a company from the ground up, how hard can it be to sort out your own financial future?

The reality? DIY finance for company directors is full of hidden traps. At Gresham Wealth Management in Hale, Cheshire, we’ve seen it all—the good, the bad, and the downright risky.

Here are the five most common mistakes business owners make when they try to go it alone—plus key insights for 2025 following Rachel Reeves’ most recent Budget.

1. Mixing Personal and Business Finances

It’s tempting to blur the lines between your company’s money and your own, especially in the early years. But muddled finances can lead to tax headaches, cash flow problems, and even legal trouble. Keeping your business and personal accounts, investments, and expenses separate is a must—not just for your sanity, but for HMRC too.

Key Insight for 2025:
Rachel Reeves’ Budget tightened reporting rules for business expenses, making it more important than ever to separate company and personal transactions. Mixing the two can now trigger automatic reviews, extra scrutiny, and potential penalties.

GWM pro tip: Use your accountant and financial adviser to keep everything watertight and tax-efficient.

2. Neglecting Pension Planning

Many directors assume the company is their pension—one day they’ll sell up and cash in. But relying solely on your business to fund your retirement is risky. Markets change, buyers disappear, and sometimes succession plans don’t work out. Tax-advantaged pension planning through your company can be hugely beneficial, yet it’s often overlooked.

Key Insight for 2025:
The Budget left annual allowances unchanged, but it did introduce significant changes to the inheritance tax treatment of pensions. Reviewing your retirement strategy now is essential to ensure your pension remains both tax-efficient and flexible for future planning.

GWM pro tip: Start building pension contributions into your business plan from the outset—your future self will thank you.

3. Overpaying (or Underpaying) Yourself

How you extract profit from your company—salary, dividends, or a mix—has a huge impact on your tax bill and personal wealth. Many directors either play it too safe and take minimal income (risking under-utilising tax allowances), or pay themselves inefficiently and lose out to unnecessary taxes.

Key Insight for 2025:
With dividend tax band changes and tweaks to income tax thresholds in Rachel Reeves’ Budget, the way you pay yourself in 2025 may look very different from previous years. A tailored approach is more important than ever.

GWM pro tip: Regular reviews with a financial planner ensure you’re making the most of all available allowances and extracting value from your business tax-efficiently.

4. Ignoring Protection (Until It’s Too Late)

When you’re the driving force behind the company, what happens if you’re suddenly not around? Many directors forget to insure themselves, their income, or their key people, leaving their business (and family) vulnerable if the unexpected strikes.

Key Insight for 2025:
While the Budget didn’t directly change the tax treatment of business protection, the broader environment is shifting. Regularly reviewing your protection ensures it stays cost-effective, tax-efficient, and tailored to your business.

GWM pro tip: Business protection (like Key Person Cover and Shareholder Protection) and personal cover aren’t just “nice to haves”—they’re vital.

5. Letting Tax Drive Every Decision

Yes, nobody wants to pay more tax than necessary, but making every investment or financial choice just to save tax can backfire. Chasing tax breaks can mean missing out on broader financial planning opportunities or taking more risk than you intended.

Key Insight for 2025:
With several headline-grabbing tax changes this year, it’s tempting to let tax dominate your decisions. But smart planning takes the whole picture into account—ensuring you build real, sustainable wealth.

GWM pro tip: Work with an adviser who takes a holistic view—tax planning is just one part of a robust wealth management strategy.

In Summary

DIY investing might seem cost-effective, but the pitfalls can far outweigh any savings. At Gresham Wealth Management, we help business owners build, protect, and grow their wealth—with the expertise to avoid costly mistakes.

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