If You Couldn't Pick Up the Phone Tomorrow: A Continuity Plan for the Business Owner Who'd Rather Not Think About It

Nobody enjoys planning for the possibility that they might be laid low. It sits somewhere between superstition and morbid curiosity, which is precisely why so many small business owners never get round to it. Yet the numbers are unambiguous: thousands of otherwise healthy business owners across the UK are suddenly unable to work each year through accident, illness or family emergency. For an employee, that is a personal difficulty. For a sole trader, it is a business-critical event — because in the eyes of HMRC, the bank and your clients, you are the business.

The good news is that the groundwork is neither complicated nor expensive. It is a handful of documents, a conversation or two, and an hour with a filing cabinet.

The problem with being the only person who knows

Ask a typical sole trader where their VAT reference is, which months their Self Assessment payments on account fall due, or who the main contact at their largest client is, and they will answer instantly. Ask anyone else connected to the business, and you will get a blank stare.

That knowledge gap is the real vulnerability. A business rarely fails in the weeks after its owner falls ill because of the illness itself; it fails because invoices go unsent, tax deadlines are missed unnoticed, and clients drift away while nobody answers the phone. Continuity planning is, at heart, about closing that gap before it matters.

Lasting powers of attorney: not just for later life

A lasting power of attorney (LPA) is the cornerstone document, and it is widely misunderstood. Many people assume it is something you arrange in retirement. In reality, an LPA can only be registered while you have mental capacity — and if you lose capacity without one, your family must apply to the Court of Protection to be appointed as your deputy. That process takes months, costs considerably more, and leaves your business rudderless in the meantime.

There are two types relevant here:

• Property and financial affairs LPA — allows a chosen attorney to operate your bank accounts, pay suppliers, chase debtors and sign tax returns on your behalf.
• Health and welfare LPA — less directly commercial, but worth putting in place at the same time to avoid two separate rounds of paperwork.

For company directors, the position is slightly different: the company is a separate legal person, so an LPA covers your personal authority as a director rather than the company's day-to-day running. Which brings us to the next point.

Who can speak to HMRC on your behalf?

Even with an LPA in place, there are simpler mechanisms worth using. HMRC allows you to nominate an authorised agent — an accountant, typically — to deal with your tax affairs, and many firm owners already have this arrangement without realising its continuity value. If your accountant holds proper authorisation (a 64-8 for agents, or online authorisation through the agent services account), they can file returns, correspond with HMRC and manage deadlines regardless of your personal circumstances.

For limited companies, it is also sensible to ensure that more than one person is registered with Companies House as having authority — a second director or a company secretary — so that confirmation statements and similar filings do not stall.

If you run the business alone and have no agent, consider at minimum writing a short letter naming a trusted person, telling them which accountant or adviser to call first, and leaving it somewhere findable. It is not legally watertight, but it buys precious time.

Records that a stranger could navigate

The second pillar is accessibility. Records stored solely in your head, or in a password-protected notebook only you use, are of little use to a spouse or colleague trying to keep the show on the road.

A practical checklist:

• A single, current list of bank accounts, references (UTR, VAT number, PAYE reference), and login locations — held securely, perhaps with a solicitor or in a sealed envelope with a named person.
• Cloud-based bookkeeping rather than a local spreadsheet, so records can be reached from anywhere. Since Making Tax Digital, most businesses have moved this way for VAT; extend the same thinking to everything else.
• A recurring payments schedule — direct debits, standing orders, loan repayments — so whoever steps in knows exactly what must be paid and when.
• A client contact list with brief notes on expectations, so communication continues without you.

You do not need to hand over the keys today. You need to ensure the keys could be found.

Insurance: buying breathing room

Continuity planning is not only about administration; it is about cash. Two policies deserve attention:

• Income protection insurance replaces a proportion of your earnings if you cannot work due to illness or injury. For sole traders, whose income stops the moment they do, this is often the single most valuable policy available.
• Key person insurance suits companies where the loss of one individual — often the owner — would jeopardise the firm's ability to trade or meet loan covenants. The payout goes to the business, buying time to recruit or restructure.

Premiums depend on age, health and occupation, but cover is frequently cheaper than owners expect. An insurance broker or financial adviser can talk you through the options; we are always happy to help you quantify what the business actually needs to survive each month, which is the number the cover should be built around.

Five steps to take this month

1. Put a property and financial affairs LPA in place, and register it.
2. Confirm your accountant (or another adviser) is formally authorised to deal with HMRC for you.
3. Compile a single secure document listing accounts, references and recurring payments.
4. Move any remaining records into cloud bookkeeping that a second person could access.
5. Obtain quotes for income protection or key person cover.

None of these steps require you to dwell on worst-case scenarios for more than an afternoon. They simply ensure that if the unthinkable happens, the business you have built does not quietly unravel while you recover. That, ultimately, is what dependable support looks like — being there even when you cannot be.

If you would like help assessing your current arrangements or quantifying your business's monthly survival figure, do get in touch. It is a far easier conversation now than it would be later.