If you’re a small business owner thinking of treating your family to a well-deserved holiday, you might be shocked to learn just how much profit your company needs to generate for you to afford that £6,000 getaway. Spoiler alert: it’s often double that figure once tax is factored in.

As accountants, we see this misconception all the time. Clients ask: “How can a £6k holiday end up costing me over £16k in profits?” The answer lies in understanding how tax—particularly corporation tax and dividend tax—eats into your business profits before you can spend a penny personally.

Let’s break it down and show how the right accounting support can potentially save you up to £7,587 in tax on that one holiday alone.

The Scenario: £6,000 Holiday for a Business Owner

Let’s assume:

• Your business is making between £50,000 and £250,000 in profit.
• You personally need to withdraw £50,000 per year to support your lifestyle.
• You’re looking to take your family on a £6,000 holiday.

On the surface, it seems simple: make £6,000, withdraw £6,000, book the flights.

But here’s the harsh truth…

The True Cost of That £6k Holiday (Based on Tax)

1. If you’re earning £50k–£100k personally

You’re in the higher rate tax bracket. To afford that £6,000 holiday, your company must profit:

💸 £12,322
 📉 Effective tax rate: 51.31%

That means over half of what you earn is going to HMRC.

2. If you’re earning over £100,000

Now you start losing your personal allowance (£12,570) too. So the tax pain gets worse:

💸 £16,530 needed to afford £6,000
📉 Effective tax rate: 63.7%

You read that right. You’re losing almost two-thirds of your profit to tax just to fund a single family holiday.

Why Most Accountants Don’t Warn You in Time

This is where traditional accountants fall short. They don’t spot these issues until it’s too late—usually after the financial year ends, during your annual accounts review.

By then, there’s little you can do to reduce tax liability. The holiday is booked, the tax year is closed, and HMRC is waiting for its cut.

How Proactive Accountancy Saves You Thousands

At Adaptive Accountancy, we do things differently.

Real-Time Bookkeeping

We update your accounts weekly, not yearly. This means you always know where you stand, cashflow-wise and tax-wise.

Quarterly Management Accounts & Tax Planning

We prepare draft accounts and tax forecasts every 3 months. This gives us the opportunity to plan your dividends and spending before you hit higher tax thresholds.

Example: If you’d talked to us before booking that holiday, we might have advised you to:

• Delay the dividend slightly
• Keep your personal income below £50,000

• Result: You pay only £8,945 in profit to fund the £6,000 trip

💡 Savings: £7,587

Lower Your Tax with Smart Structuring

We don’t just crunch numbers. We help you strategically plan your lifestyle around tax rules, so your business supports your life—not the other way around.

That might include:

• Spreading dividends throughout the year
• Using pension contributions to reduce corporation tax
• Keeping income below tax cliffs
• Creating a separate investment company for long-term asset growth

What This Means for Accountants and Business Owners

Helping clients save tax isn’t just about filing returns—it’s about understanding their lifestyle goals and aligning those with the right financial and tax strategy.

If you’re an accountant, ask yourself:

• Are you reviewing your clients’ tax positions quarterly?
• Are you tracking profits and personal income in real time?
• Can you confidently advise on the real cost of lifestyle decisions before they’re made?

If not, there’s a serious risk your clients are losing thousands unnecessarily—and they won’t even know it.

Want to Know How Much You Could Be Saving?

If you’re a business owner, or an accountant looking to offer clients proactive, real-time tax advice, reach out to us at Adaptive Accountancy.

We’ll run the numbers and show you exactly how much that holiday, new car, or investment will actually cost you and how to cut that tax bill down.