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Making Tax Digital for Income Tax regime extended to smaller businesses
| 01-04-2025
The Spring Statement announced that Making Tax Digital for Income Tax (MTD for IT) regime will be further extended to smaller businesses.
Spring Statement: How is your business affected?
| 01-04-2025
The Chancellor of the Exchequer, Rachel Reeves, delivered her Spring Statement last week in which she outlined the government’s economic plans, including spending decisions, tax policies and efforts to boost growth
The Growth Agenda: Small businesses putting forward ideas for growth
| 25-03-2025
Goldman Sachs published their “The Growth Agenda” report last week. This is a report that puts forwards the ideas of small business owners that could help to boost the UK economy. The report looks at issues around
Are you ready for April 2025?
| 25-03-2025
The new National Living Wage and National Minimum Wage rates will come into force from 1 April 2025. There are also changes to the National Insurance employers pay that take effect from 6 April. For many businesses,
Cutting wasteful spending: What your business can learn from the government’s crackdown
| 25-03-2025
The government has just announced that thousands of government credit cards will be cancelled as part of a crackdown
Safe working with screens: What employers need to know
| 18-03-2025
The Health and Safety Executive are reminding employers about their responsibilities to protect workers from the health risks that come from working with display screen equipment (DSE), including PCs, laptops, tablets
New legislation aims to drive building boom
| 18-03-2025
The Planning and Infrastructure Bill was introduced to Parliament last week. The legislation is being heralded as bringing transformative reforms to the UK building sector that will boost homebuilding and remove
Five business failures and the lessons they teach
| 18-03-2025
Success in business is never guaranteed, even for brands that dominate their industry for decades. A recent episode of the BBC Radio 4 show, Toast, explored five once-thriving companies: Little Chef, Vine, Mothercare,
Farming reforms to boost profitability
| 12-03-2025
The government has announced its plans for new policies that it expects will make farming more profitable. The new policies include: Seasonal Worker visa route to be extended for another 5 years. New requirements for government catering contracts
Boost for rural businesses: Government announces ÂŁ38 million investment
| 12-03-2025
The UK government has announced a major funding boost for rural areas, with up to ÂŁ38 million allocated to support infrastructure, essential services, and business growth in the countryside.
New contract agreed for GPs
| 12-03-2025
A new deal for GPs has been agreed between the government and the British Medical Association (BMA). Proposed reforms that were accepted by the BMA include an overall funding uplift of ÂŁ889 million for the 2025/26 GMS contract.
Plug-in van grant extended for another year
| 12-03-2025
The Future of Roads Minister, Lillian Greenwood, has confirmed that the plug-in van grant will be extended for another year. The plug-in grant means that businesses can obtain grants of up to ÂŁ2,500 when buying an
Public Procurement Act to give more opportunities to small businesses
| 12-03-2025
The Public Procurement Act 2023, originally set for implementation on 28 October 2024, has now officially come into force. This legislation introduces new rules designed to make it easier for smaller businesses to
Spring Statement news: Public spending cuts likely
| 12-03-2025
News reported last week said that the Chancellor has put together draft plans for spending cuts to welfare and other government departments. At the time of the 2024 Autumn Budget, the Office for Budget Responsibility
Surprise jump in inflation: How to navigate your business
| 26-02-2025
Inflation figures for January 2025 were released last week and showed a surprising jump to 3.0%, up from 2.5% in December. The Office for National Statistics (ONS)
Wages growing faster than inflation
| 26-02-2025
Latest figures released by the Office for National Statistics (ONS) show that average wages are continuing to grow faster than inflation. After adjusting for consumer price inflation (CPI), wages rose 3.4% between October
40% business rates relief for film studios
| 26-02-2025
Beginning last week (17 February), Local Authorities were able to begin awarding a 40% reduction in business rates bills to film studios. The tax relief is aimed at boosting the film industry in the UK and contributing
HMRC late payment interest rates to be cut
| 18-02-2025
Following the reduction in the Bank of England base rate, HM Revenue & Customs (HMRC) have confirmed that their interest rates will be reduced accordingly. Late payment interest will reduce to 7% from 7.25%.

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The Spring Statement announced that Making Tax Digital for Income Tax (MTD for IT) regime will be further extended to smaller businesses. Read on to see how and when your business might be affected. What is MTD for IT? Making Tax Digital for Income Tax (MTD for IT) is a government initiative that requires self-employed individuals and landlords with income over a certain limit to keep digital records and submit quarterly tax updates to HM Revenue and Customs (HMRC) using compatible software. Who does MTD for IT apply to? These rules are mandatory and come into effect from 6 April 2026 for sole traders and property landlords who generated trade and rental income of more than £50,000 in the 2024/25 tax year. This income threshold will then drop so that sole traders and property landlords with income of more than £30,000 in the 2025/26 tax year will be brought into MTD for IT from 6 April 2027. The Spring Statement has now confirmed that this threshold will be reduced further so that sole traders and property landlords with income over £20,000 in 2026/27 will have to comply with the rules from 6 April 2028. MTD for IT will also affect how tax returns are submitted It has also now been confirmed that if you are required to use MTD for IT, your end-of-year tax return must also be submitted using MTD-compatible software. It won’t be possible to use a free HMRC online service. What can you do? This may be a big adjustment in the way you keep your accounting records. Please feel free to get in touch if so. We would be happy to provide advice, recommendations and training, if needed, so that you can meet this new requirement with the minimum hassle and stress.

The Chancellor of the Exchequer, Rachel Reeves, delivered her Spring Statement last week in which she outlined the government’s economic plans, including spending decisions, tax policies and efforts to boost growth while managing public finances.

What did the statement tell us about public finances and the economy?

The Statement came on the back of the latest forecasts prepared by the Office for Budget Responsibility (OBR). The forecasts showed a more challenging outlook than was the case last autumn. The OBR cited falls in business and consumer confidence, rising European energy costs, increased government borrowing costs and global uncertainties from issues such as the war in Ukraine and trade tariffs.

As a result, the OBR have downgraded their forecast of GDP growth to 1% for this year. Last autumn they predicted growth of 2%, so this is a significant adjustment in their expectations. However, their projections of growth in the next four years have been upgraded, suggesting that they see the long-term more positively.

The OBR have forecast inflation to average 3.2% this year, up from 2.6% in their previous estimate. They predict that inflation will fall to 2.1% in 2026 and 2% in 2027.

The forecasts also showed that without intervention, public finances would fall short of the targets set at the Autumn Budget.

What has the chancellor done about it?

Much has been made in recent weeks of the Chancellor’s self-imposed stability and investment rules, and whether she will be able to maintain them in the face of the afore-mentioned challenges.

However, the Spring Statement confirmed the Chancellor’s commitment to the rules.  Governments often use these fiscal rules to provide credibility to financial markets.

This decision meant there was pressure on the Chancellor to either raise taxes or reduce spending to cover the forecast shortfall.

In good news for businesses, the Chancellor made no direct increases to taxes. She confirmed her intention to have only one major fiscal event a year and so further tax changes will wait until the 2025 Autumn Budget.

Instead, the Statement outlines a number of plans to reduce public spending, including welfare reforms, and reduced day-to-day spending in government departments. In addition, it is clear the Chancellor has adopted a policy of growing the economy and is looking at ways to promote that, including by supporting increased homebuilding activity. Economic growth is aimed at ‘putting more money in people’s pockets’, but it also indirectly boosts the revenues the government receives.

The OBR have confirmed that the policies outlined in the Spring Statement largely restore the public finance targets set last Autumn.

Will there be any effects on my business from policies announced in the Statement?

Here’s some quick highlights of measures that may affect your business.

Making Tax Digital

The Spring Statement confirmed that Making Tax Digital for Income Tax (MTD for IT) will be further extended to bring in sole traders and property landlords with income of ÂŁ20,000 or more.

Read our separate article on MTD for IT to see how and when your business might be affected.

Business rates reform

The government has been consulting on longer-term measures to support high street businesses. The Spring Statement confirmed that an interim report on the future of the business rates system will be published in the summer. Further policy detail will follow in the autumn.

Additional clarity on R&D reliefs

Due to the complexity of the rules around R&D reliefs, many companies do not know at the point of making an R&D investment whether the costs will qualify for R&D relief. This can lead to no claim being made, or a claim being made that doesn’t qualify.

HMRC already offer voluntary advance assurances to businesses to help them have more certainty about their claim. However, this service is not commonly used.

The government is consulting on widening the use of ‘advance clearances’ to try and make them more useful and reduce errors and fraud. One aspect being considered is whether to make assurances mandatory in certain areas – particularly those where HMRC feels the risk of an incorrect claim is high.

The consultation also considers whether there should be a minimum expenditure threshold before R&D relief can be claimed. In the past, a ÂŁ25,000 threshold has been used.

Phoenixism to be tackled

‘Phoenixism’ is where company directors go insolvent to evade tax and write off debts owed to others, and then start a new business.

HMRC, Companies House and the Insolvency Service will be delivering a joint plan to better tackle those abusing the insolvency regime. This will include making more directors personally liable for the taxes of their company and increasing the number of enforcement sanctions.

One aspect that could affect newly formed companies is that HMRC may ask for an upfront payment of tax as security.

Final thought

Some may have hoped the Spring Statement would bring some relief from the Employers NI changes due to go into effect in April, however the Spring Statement mainly focused on government policies related to public, welfare and defence spending. Announcement of any further tax changes will now wait until the 2025 Autumn Budget.

If you are concerned about how any aspect of the Spring Statement may affect you, please get in touch with us. We would be happy to provide you with personalised advice.

Goldman Sachs published their “The Growth Agenda” report last week. This is a report that puts forwards the ideas of small business owners that could help to boost the UK economy.

The report looks at issues around several areas that affect small businesses and include ideas that may help to drive growth. The main areas discussed in the report include:

For each area, the report includes a summary of the main challenges and then some key ideas that would help to mitigate some of the challenges.

The ideas have then been summarised into a 2-page ‘Key Calls to Action’ summary. These are split between quick wins (straightforward initiatives that could be introduced relatively easily), momentum builders (initiatives that will require time and investment), and fundamental changes (ambitious ideas and major transformations).

As examples of the ideas included, a suggestion is made to expand R&D credits to include AI implementation and training to incentivise AI implementation. A business rates reform is also proposed to protect sectors that are property-intensive.

Whether these policy ideas are likely to come to fruition remains to be seen. However, the government has confirmed that it will consult on establishing the Business Growth Service it announced in December. This is to be a one-stop shop that will provide government advice and support to small businesses and help with raising finance.

To review the report in full, see: https://www.goldmansachs.com/images/community-impact/10000-small-businesses/uk/news-and-programme-information/generation-growth-the-growth-agenda/Report.pdf

The new National Living Wage and National Minimum Wage rates will come into force from 1 April 2025.

There are also changes to the National Insurance employers pay that take effect from 6 April. For many businesses, the April payroll will represent a sizeable step up in labour costs.

As a reminder, here is a quick recap of the changes.

National Minimum Wage rates

The new minimum wage rates are as follows:

  Hourly Rate
National Living Wage (21 and over) ÂŁ12.21
18-20 Year Old Rate ÂŁ10.00
16-17 Year Old Rate ÂŁ7.55
Apprentice Rate ÂŁ7.55
Accommodation Offset ÂŁ10.66

Employers National Insurance changes

The percentage rate of Employers’ National Insurance (NI) that’s paid on an employee’s earnings increases to 15% (from 13.8%).

The threshold that an employee needs to be earning before any Employers’ NI is due drops to £5,000 a year. Previously this was £9,500.

If you use online payroll software, the new Employers’ NI rates should be automatically included. However, please check with your payroll software provider if you are not sure.

If you need any help using the new rates or calculating the amount of minimum wage that is due to a worker, please get in touch.

We would be happy to help you!

The government has just announced that thousands of government credit cards will be cancelled as part of a crackdown on wasteful spending. With spending on these cards reportedly increasing fourfold in the last four years, it’s a reminder that keeping an eye on expenses is crucial.

While your business is likely much more mindful of costs than a government department – where inefficiencies can go unchecked – this is still a great opportunity to review your own spending and see if there’s any waste you can cut out.

Are you spending more than you need to?

Even in a profit-driven business, unnecessary spending can creep in without you realising it. Some common areas where businesses overspend include:

Simple steps to reduce waste

If you want to tighten up your spending and make sure every pound is working for you, here are some practical steps to take:

  1. Review your expenses: Take a look at your spending over the last year and identify anything that isn’t delivering real value.
  1. Set approval processes: Introduce spending limits and require approvals for larger expenses to keep things under control.
  1. Use expense tracking tools: Software can help you see where your money is going in real-time, making it easier to spot savings.
  1. Negotiate with suppliers: Regularly review your supplier contracts to make sure you’re getting the best price possible.
  1. Update employee expense policies: Make sure your team knows what’s acceptable to claim and encourage cost-conscious decisions.
  1. Compare with industry standards: Benchmark your spending against similar businesses to see where you might be overspending.

How we can help

We’re here to help you keep your finances in top shape. We can review your expenses, identify cost-saving opportunities, and help you to make any needed improvements to your financial controls.

If you’d like to make sure your business isn’t wasting money unnecessarily, get in touch with us today. Cutting out waste doesn’t just protect your bottom line – it also helps your business grow stronger in the long run!

The Health and Safety Executive are reminding employers about their responsibilities to protect workers from the health risks that come from working with display screen equipment (DSE), including PCs, laptops, tablets and smartphones.

The Health and Safety (Display Screen Equipment) Regulations apply to any worker that uses DSE on a daily basis for continuous periods of an hour or more.

For these workers, the Regulations mean that employers need to do a DSE workstation assessment and reduce risks such as by making sure breaks are taken.

The law applies not only to workers at a fixed workstation but also mobile workers, home workers and hot deskers. Home workers can be easily overlooked because you don’t regularly see their work environment.

As well as the assessments, employers are also required to provide eye tests if requested by the employee and to provide training and information.

HSE provides a guide on what employers need to do as well as a checklist of the things to consider when doing a workstation assessment.

See: https://www.hse.gov.uk/msd/dse/index.htm

The Planning and Infrastructure Bill was introduced to Parliament last week. The legislation is being heralded as bringing transformative reforms to the UK building sector that will boost homebuilding and remove obstacles to needed infrastructure.

Here is an outline of some of the measures introduced by the legislation.

Planning committees

A national scheme of delegation will specify which types of applications are to be determined by officers and which by planning committees. There will be limits on the size of planning committees and planning committee members will have mandatory training.

Councils will also be able to set their own planning fees.

Nature Restoration Fund

A Nature Restoration Fund will be established so that payments made into the fund allow building to proceed. Contributions will be pooled so that larger environmental interventions can be funded.

Compulsory purchase reform

The compulsory purchase process for buying land for public interest projects will be adjusted. The reforms will mean compensation paid to landowners is not excessive and the process by which ‘hope value’ is removed when it’s justified in the public interest will be sped up.

While these adjustments aim to speed up the development of public interest projects, landowners may not see these changes as an improvement.

Development Corporations

Development Corporations have been used in the past where the risk or scale of a development is too large for the private sector, for example in building post-war new towns.

The legislation will strengthen Development Corporations so that it will be easier for them to deliver large-scale developments, such as new towns that include affordable housing, GP surgeries, schools and public transport alongside new homes.

Strategic planning

Across England there will be a system of ‘strategic planning’ known as spatial development strategies. This will make it possible to consider needs across several local planning authorities and determine where the most sustainable building areas are, making sure that the requirements for development and infrastructure are joined up.

National Significant Infrastructure Projects (NSIP)

Consultation requirements for national projects like windfarms, railway lines or roads are to be streamlined under the new legislation. Infrastructure applications are assessed against national policies, so these policies will now be updated at least every five years.

The Highways Act and the Transport and Works Act are also to be updated so that bureaucracy on transport projects is reduced.

Challenges to government decisions on major infrastructure projects will also be limited. Meritless cases will have one rather than three attempts at legal challenge under the new legislation.

Clean energy

The legislation will help approved clean energy projects be prioritised for grid connections.

Bill discounts

The government are anticipating that around twice as much new transmission network infrastructure – overhead cables, pylons, substations etc – will need to be built by 2030 as was built in the past decade.

As an incentive to accept these changes, those living within 500m of new pylons will be given money off their electricity bills for 10 years.

Developers will also be given new guidance on providing benefits such as sports clubs, educational programmes or leisure facilities to communities that host transmission infrastructure.

Reaction

Unsurprisingly the legislation was greeted by positive comments from government and large homebuilder representatives. However, Brian Berry, Chief Executive of the Federation of Master Builders, chimed in with a comment for smaller builders.

He noted that only around 10% of new homes are being built by SMEs today, compared with 40% in the 1980s. He cited the planning system as the number one issue holding back the delivery of new homes, with availability and viability of land also contributing. He said: “Supporting small builders through the planning system and reducing unnecessary bureaucracy will be key to opening up small sites, and today’s announcement will be welcomed by many across the industry.”

Legislation takes time to clear parliamentary process, but we look forward to seeing a good effect from the reforms for our construction industry clients.

See: https://www.gov.uk/government/news/biggest-building-boom-in-a-generation-through-planning-reforms

Success in business is never guaranteed, even for brands that dominate their industry for decades. A recent episode of the BBC Radio 4 show, Toast, explored five once-thriving companies: Little Chef, Vine, Mothercare, Green Shield Stamps and Safeway.

Each of these businesses were very successful for a period of time, but for one reason or another ultimately failed. Their downfall may have been caused by a number of contributing reasons including:

Their stories offer valuable insights that can help you avoid their mistakes with your own business.

See: https://www.bbc.co.uk/programmes/articles/2qFwVDZhfKHs2Y1qhpF1ZCf/five-successful-businesses-that-eventually-failed

The government has announced its plans for new policies that it expects will make farming more profitable.

The new policies include:

Steve Reed, the Secretary of State for Environment, Food and Rural Affairs, said: “The underlying problem is that farmers do not make enough money for the hard work and commitment they put in.” He went on to say that his focus “is on ensuring farming becomes more profitable.”

The announcement is positive news for farmers, and we look forward to seeing whether this translates to an uplift in profitability for our farmers!

See: https://www.gov.uk/government/news/government-announces-raft-of-new-policies-and-major-investment-to-boost-profits-for-farmers

The UK government has announced a major funding boost for rural areas, with up to £38 million allocated to support infrastructure, essential services, and business growth in the countryside. The aim is that the funding will help to create jobs and drive economic growth while improving quality of life for rural communities. 

Rural England Prosperity Fund given ÂŁ33 million

A significant portion of this investment, up to £33 million, will be directed to the Rural England Prosperity Fund (REPF). The fund’s goal is to strengthen the rural economy and is designed to improve local infrastructure and essential services while supporting rural businesses to expand and diversify.

What kind of projects will be funded?

Businesses and community organisations in rural areas will be able to apply for funding for projects that help stimulate economic growth and enhance local facilities. Some of the key initiatives that will be eligible for REPF funding include:

Additional ÂŁ5 million to support rural services

In addition to the REPF, a further ÂŁ5 million has been allocated to support essential services. The key areas of investment this fund will make include:

What happens next?

Funding allocations for local authorities will be published soon. If you’re a business owner or community leader in a rural area, keep an eye on local authority announcements to see how you can benefit from this funding.

Need advice on how this might impact your business? Get in touch, and we’ll help you navigate the opportunities ahead!

See: https://www.gov.uk/government/news/government-funding-for-rural-communities-set-out

A new deal for GPs has been agreed between the government and the British Medical Association (BMA).

Proposed reforms that were accepted by the BMA include an overall funding uplift of £889 million for the 2025/26 GMS contract. This represents a 7.2% boost to the contract, which is higher than the increase to the NHS budget as a whole. However, the BMA’s acceptance of the funding uplift was given on the proviso that the government commits to renegotiating a completely new national contract within this parliament. They are looking for confirmation of this in writing by mid March 2025.

The increase includes:

In addition to the ÂŁ889 million uplift, there will also be an ÂŁ80 million investment for a new Enhanced Service that compensates GPs for advice and guidance requests when unsure about making a referral to hospital. This funding will allow doctors to liaise with specialist consultants and help to avoid people being added to waiting lists unnecessarily.

The BMA sees the new contract as an important first step for GPs as they aim to address underfunding over the next few years.

See: https://www.bma.org.uk/bma-media-centre/bma-accepts-202526-contract-for-gps-in-england-as-a-starting-point

The Future of Roads Minister, Lillian Greenwood, has confirmed that the plug-in van grant will be extended for another year.

The plug-in grant means that businesses can obtain grants of up to ÂŁ2,500 when buying an eligible small van up to 2.5 tonnes and up to ÂŁ5,000 for an eligible larger van up to 4.25 tonnes.

The grant is made available through the dealer or manufacturer as a discount on the purchase price when the van is purchased. So, there is no need for each purchaser having to go through a grant application themselves.

The government is also removing the requirement for additional training that is currently required for zero emission vans but not petrol or diesel ones.

Zero emission vehicles also carry some attractive tax advantages. If you are looking at replacing vehicles and would like help to know what the end costs are for you, please get in touch. We would be happy to help you!

See: https://www.gov.uk/government/news/120-million-to-roll-out-more-electric-vans-taxis-and-motorbikes

The Public Procurement Act 2023, originally set for implementation on 28 October 2024, has now officially come into force. This legislation introduces new rules designed to make it easier for smaller businesses to compete for and win public sector contracts.

Key changes under the Act

The Act establishes clear rules that all public bodies must follow when buying goods and services. One of the most significant updates is the introduction of a Central Digital Platform. This is now available and allows businesses to register their details and access all potential bidding opportunities in one place.

An end to late payments

A particularly welcome change is the introduction of a mandate of 30-day terms for all public sector contracts. This measure is expected to improve cash flow for smaller businesses, which often struggle with delayed payments.

Cabinet Office Minister Georgia Gould highlighted the benefits of the new legislation, stating that the new Procurement Act will “tear down barriers that stop small businesses from winning government work, giving them greater opportunity to access the £400 billion spent on public procurement every year.”

New powers to deal with poor suppliers

The Act also introduces new powers to investigate and take action against poorly performing suppliers or those that pose security risks to supply chains. The Procurement Review Unit (PRU) and National Security Unit for Procurement (NSUP) will oversee these investigations. Underperforming suppliers could face exclusion from future contracts or even debarment.

A boost for small businesses

Public sector spending is significant, and this legislation marks a significant step towards creating more opportunities for smaller businesses. By reducing bureaucratic hurdles, ensuring fairer payment terms, and increasing transparency, the Act provides SMEs with a greater chance to secure valuable government contracts.

For small business owners, now is the time to explore these new opportunities and take advantage of the changes aimed at levelling the playing field in public procurement.

See: https://www.gov.uk/government/news/new-public-procurement-rules-to-drive-growth-opportunities-for-small-businesses-and-exclude-suppliers-that-fail-to-deliver

News reported last week said that the Chancellor has put together draft plans for spending cuts to welfare and other government departments.

At the time of the 2024 Autumn Budget, the Office for Budget Responsibility (OBR) said that there was a £9.9 billion buffer available against the Chancellor’s own self-imposed borrowing rules.

However, the OBR’s spring forecast seems likely to show that this buffer has disappeared due to the events of the last few months, including trade tariffs, the war in Ukraine and higher inflation and borrowing costs.

It could be argued that an alternative strategy would be for the Chancellor to amend her borrowing rules. However, to do so would risk losing credibility with the financial markets and the Chancellor has described her rules as “non-negotiable.” So, it seems that spending cuts are now likely, mainly to welfare payments.

How could welfare cuts affect my business?

Such cuts are likely to have ripple effects on small businesses, impacting both their customers and employees. Here are some key ways that these cuts could affect your business:

  1. Reduced consumer spending: If welfare payments are reduced, lower-income households will have less disposable income, leading to decreased sales for businesses that depend on everyday spending, such as shops, cafes, and tradespeople. It can also lead to less demand for non-essential goods and services, such as entertainment, beauty treatments, and leisure activities.
  1. Workforce challenges: Employees who may also rely on welfare support, such as Universal Credit top-ups or childcare subsidies, could be affected by cuts. This could lead to increased financial strain for them that leads to reduced productivity, higher stress levels, and even absenteeism. It may also mean difficulties in retaining staff if they seek higher wages elsewhere or struggle to afford travel and childcare costs.
  1. Higher pressure on business owners: Less support may be available for self-employed individuals who rely on welfare payments during periods of fluctuating income. There may also be increased pressure to raise wages for affected employees, potentially squeezing already tight margins.
  1. Local economy knock-ons: Local economies shrink when people have less money to spend. For businesses that rely on strong community support, particularly in areas with high welfare dependency, this can present challenges.
  1. Impact on Business-to-Business (B2B) services: If welfare cuts lead to a slowdown in consumer spending, other small businesses that provide services to local companies (such as marketing, IT, and consulting) could also suffer as their clients tighten budgets.

What can you do?

Some basic steps you could consider include:

While government decisions on welfare are often made with national budgets in mind, businesses are often on the front line of these changes. While this can create uncertainty, with the right planning and business strategy, you can take proactive steps to protect and even strengthen your business during challenging times.

Staying ahead of economic shifts is key to long-term success. If you’d like expert guidance on how to navigate the impact of welfare spending cuts on your business, get in touch with us today. We’d be happy to help you!

See: https://www.bbc.co.uk/news/articles/c1lpjqg2mp5o

Inflation figures for January 2025 were released last week and showed a surprising jump to 3.0%, up from 2.5% in December.

The Office for National Statistics (ONS) reported that the largest upward contribution to the change came from transport, and food and non-alcoholic beverages.

The upward pressure in transport costs came from air fares and motor fuels. Traditionally air fares increase in December before falling in January, however January 2025 saw the smallest January fall since January 2020.

Many businesses are feeling the pinch of increasing costs and news that inflation is rising may not be good news. Some economists believe that the rise will not affect the Bank of England’s plans for the interest base rate – the Bank has already forecast that inflation will increase to 3.7% later this year. However, regardless of this, inflation can squeeze profit margins and put a strain on cash flow.

However, inflation doesn’t have to derail your business. Read on to see how with the right strategies you can mitigate the impact and even uncover new opportunities. Here are some key steps you can take to navigate inflationary pressures.

Review pricing regularly

During periods of rising inflation, it’s essential to review your pricing strategy. Ensure that your prices are reflecting the increased costs of goods and services.

This can be easier said than done because of not wanting to upset your customers. So, one strategy could be to look at smaller, incremental increases rather than implementing one large hike.

Also, be transparent about the reasons behind any changes – many customers understand inflationary pressure and appreciate it when they are clearly communicated with.

Focus on efficiency

Look for areas within your business where you can improve efficiency. Perhaps you have opportunities to eliminate areas of wastage, or there are processes that could be automated, or you might be able to renegotiate contracts with your suppliers.

As an example, switching to digital invoicing or using cloud-based software may reduce your administrative costs. Small wins can be worthwhile as each small saving adds up over time.

Manage cash flow prudently

When inflation is on the rise, managing healthy cash flow is crucial. Monitor your cash inflows and outflows regularly, and identify any areas of concern.

If your business uses credit, try to lock in interest rates to protect yourself against potential rate hikes. You might also want to consider offering early payment discounts to customers to improve cash flow.

Adjust your stock strategy

If inflation is pushing up prices, holding too much stock may be tying up cash in goods that become more expensive to store. However, stocking up on items that are likely to increase in price could save you money in the long term.

Review your stock levels on a regular basis and this will help you to strike a balance that protects your margins.

Revisit your value proposition

Inflation is likely to be putting pressure on your customers too. Therefore, it’s essential that you are able to highlight the unique value that your business is providing them.

Focus on quality, reliability, or customer service so that you can show that you are different to your customers. When you offer something to your customers that they can’t get elsewhere, they may be more willing to accept price adjustments.

Monitor market trends

Stay informed about broader market trends and how inflation is impacting the industry sector that your business is part of. By keeping an eye on your competitors and the behaviour of your customers, you will be able to adapt your strategy to stay competitive.

Being proactive rather than reactive in seeking knowledge can make all the difference.

Plan for the long term

Inflation often runs in cycles, so it’s important to continue to think beyond the immediate challenges you may be facing. Developing contingency plans and building financial buffers can help you to prepare for future economic shifts.

Businesses that plan ahead are more likely to emerge stronger once inflation subsides.

Final thoughts

While inflation can present some significant challenges, it also offers you an opportunity to review the way your business runs and make strategic improvements to it.

By focusing on pricing, efficiency, cash flow and customer value, you can build resilience and position your business for long-term success. Stay agile, be transparent and adapt to ongoing change – your business will be better for it.

If you need help with reviewing your business processes, cash flow or pricing, why not give us a call and see how we can help you?

Latest figures released by the Office for National Statistics (ONS) show that average wages are continuing to grow faster than inflation. After adjusting for consumer price inflation (CPI), wages rose 3.4% between October and December 2024 when compared with the same period in 2023.

Unemployment figures also appear to be encouraging, with the UK’s unemployment rate remaining at 4.4%. However, the ONS has cautioned that the response rate to its survey was low. So, these figures may not reflect the true position.

What will happen over coming months?

With the upcoming increases to national minimum wage and employers national insurance, it seems likely that pay growth will reduce over coming months. Many businesses are reporting that they plan to reduce their workforce due to the increased costs.

Increasing wages can also affect the Bank of England’s decision when they set the base rate. When wages grow this means more disposable income in the economy which tends to increase demand and therefore prices. These figures may therefore make the Bank cautious of making another rate cut too soon.

If you need help with budgeting increased wage costs from April, or to look at how your pricing could be adjusted to cover the increases, please get in touch. We would be happy to help you negotiate these changes so that your business continues to grow and thrive.

See: https://www.bbc.co.uk/news/articles/c4gwgpjgl5zo

Beginning last week (17 February), Local Authorities were able to begin awarding a 40% reduction in business rates bills to film studios. The tax relief is aimed at boosting the film industry in the UK and contributing towards more box office hits being made.

The creative industries sector employs 2.4 million people and provides ÂŁ124.6 billion to the UK economy. The government hopes to boost both these figures by providing the relief. The Film Studio Business Rates Relief will be available to eligible studios in England until 2034. Where applicable, it can be backdated to 1 April 2024.

Eligible film studios should not need to apply for the relief, but should be awarded it automatically by their Local Authority.

This is one of several reliefs available or becoming available to the film and TV sector in the UK. Already available is the Audio-Visual Expenditure Credit (AVEC) that provides a tax credit of 34% on UK production costs on a film or high-end TV programme, increasing to 39% on the production costs for an animation or children’s TV programme.

From 1 April 2025, film and high-end TV companies will be able to claim a 39% credit on their UK visual effects costs. Also, the Independent Film Tax Credit will become available. This is for eligible films that have a budget of less than ÂŁ15 million and will allow for claiming an enhanced 53% rate.

The film and TV industry is seen as significant contributor to the UK economy with the potential for further growth.

If you need help with understanding what tax reliefs are available for your film or TV production, please give us a call at any time. We would be happy to help you maximise the reliefs available to you.

See: https://www.gov.uk/government/news/lights-camera-action-40-business-rates-relief-for-film-studios-rolled-out

Following the reduction in the Bank of England base rate, HM Revenue & Customs (HMRC) have confirmed that their interest rates will be reduced accordingly.

Late payment interest will reduce to 7% from 7.25%. Repayment interest – paid on tax repayments – will be reduced to 3.5%.

The change will come into effect from:

See: https://www.gov.uk/government/news/hmrc-late-payment-interest-rates-to-be-revised-after-bank-of-england-lowers-base-rate–2