When Should an Agency or Consultancy Set Up a Holding Company?

That's exactly the moment a holding company starts to earn its keep — but only if the timing's right. Get a straight answer for your agency before you spend a penny on structure.

Here's a scenario we see most months. An agency or consultancy has had a few strong years. There's a healthy cash balance building up in the company — well beyond what the founders want to draw out personally, because pulling it all out as salary or dividends would hand a big slice to HMRC. At the same time, the team has started building its own software product on the side: a tool that began as an internal time-saver and is starting to look like it might be worth something on its own.

Suddenly the single trading company is doing two very different jobs — running a services business and nursing an early-stage product — while also acting as a piggy bank for cash the owners don't need yet. That's usually the point where someone says, "Should we set up a holding company?"

This guide is about the decision, not the mechanics. We won't re-explain what a holding company is or how the inter-company dividend exemption works — our holding company advantages guide and the wider group structures pillar cover all of that. Here we focus on the question that actually matters to an agency owner: is now the right time, and is it right for us?