Topic: Uncategorized

The UK economy is showing signs of fatigue. Figures released at the end of June confirm that economic growth slowed to 0.7% in the first quarter of 2025. For small business owners, this is more than just a headline as it signals a shift in consumer behaviour, business confidence, and access to finance.

The Office for National Statistics (ONS) reports that household real incomes are falling. Disposable income is down by 1%, and personal saving rates are at their lowest since 2020. In plain terms, consumers have less money in their pockets. For businesses in retail, hospitality, or services, this may already be translating into weaker sales and a rise in price sensitivity.

At the same time, public borrowing is creeping up. Government figures show a rise in borrowing in the early months of the 2025-26 tax year, adding to fiscal pressure on the new government. With several welfare policy U-turns removing planned savings, the Chancellor faces a difficult Autumn Budget. Tax rises, cuts to investment allowances, or delays to business incentives are all possible outcomes.

The result is a more cautious economic mood. Many small business owners are already reporting tighter trading conditions and lengthening payment cycles. For those relying on external finance, the outlook is becoming more complex. Interest rates have remained relatively high, and lenders are applying stricter affordability tests – especially in sectors deemed higher risk.

What should business owners be doing now?

1. Revisit your cashflow forecasts – Account for lower revenue assumptions, changes in repayment terms, and higher finance costs. If possible, build in contingency funds for slower months.
2. Review your cost base  – Rising National Insurance contributions and minimum wage increases from April 2025 may already be having an impact. Consider whether savings can be made without affecting quality or customer service.
3. Prepare early for borrowing – If you are planning to seek finance or refinance existing lending, start the process sooner. Banks and alternative lenders will want to see up-to-date management accounts and evidence of strong financial control.
4. Talk to us – If you are concerned about profit margins, tax bills, or capital expenditure plans, now is the time to reassess. Small changes in tax planning or investment timing can make a difference.

Although growth is expected to return later in the year, the second half of 2025 is likely to be bumpy. In uncertain times, the businesses that perform best are usually those that plan ahead, communicate clearly, and keep a close eye on the numbers.

Side income over £1,000 may mean filing a tax return. HMRC is urging part-time earners to check their tax position for 2024-25, especially if they earn from casual work, renting, or crypto.

If you are earning extra income it is important to be aware of the tax implications.

The good news is there are two £1,000 tax allowances available for small amounts of miscellaneous income. The first is for property income and the second is for trading income. If you have both types of income, you can claim £1,000 for each.

• Trading Allowance: If you make up to £1,000 from self-employment, casual services (like babysitting or gardening), or renting out personal equipment (such as power tools), this income is tax-free and doesn’t need to be declared.
• Property Allowance: If you earn £1,000 or less from property-related activities (like renting out a driveway), you don’t need to report it to HMRC or include it in your tax return.

These allowances cover all relevant income before expenses. If your income is under £1,000, it’s tax-free. If you earn more than £1,000, you can choose to either deduct the £1,000 allowance from your income or list your actual expenses when calculating your taxable profit.

However, if your part-time income exceeds £1,000 in a tax year, you may need to complete a self-assessment tax return. This includes gains or income received from cryptoassets. Keep in mind this only applies if you are actively trading or selling services. If you are just clearing out personal possessions by selling them, there is usually no need to worry about tax.

If you are required to submit a tax return for the 2024-25 tax year, then the deadline to submit a tax return online and pay any tax owed is 31 January 2026.

From 2025, Companies House is rolling out new identity verification requirements for directors, people with significant control (PSCs), and anyone forming or managing a UK company. These changes form part of the Economic Crime and Corporate Transparency Act and are designed to reduce fraud and increase confidence in UK companies.

If you are involved in running a business, you may soon need to prove your identity either directly through Companies House or via a registered agent such as your accountant. Without completing verification, you will not be allowed to register a company or take up a new role as a director or PSC.

These rules apply to:

• Company directors (existing and new)
• Individuals with significant control (usually shareholders with 25% or more of shares or voting rights)
• Company formation agents
• Anyone filing information at Companies House on behalf of a business

The new system is already partially in place. Since April 2025, authorised agents can verify identities on behalf of their clients, but from a future date still to be announced, Companies House will require all key company officers to comply before filings will be accepted.

For business owners, this means a few practical actions:

• Ensure all directors and PSCs have current and valid photo ID.
• Decide whether you want to complete ID checks directly or use an authorised agent.
• Check that your company’s records at Companies House are up to date.

We expect enforcement and deadlines to follow later in the year, so it is wise to prepare in advance. If you are uncertain how these changes affect you, or how best to carry out the verification, we are happy to help.

Tensions in the Middle East have always carried global implications, but few pressure points are more critical than the Strait of Hormuz. This narrow passage off the coast of Iran is the transit route for around one-fifth of the world’s oil and a quarter of its liquefied natural gas (LNG). A closure, even temporary, would trigger a global economic ripple. For the UK, the consequences would be serious, with sharp effects on energy costs, inflation, and supply chains.

The likely impact on the UK economy

Although the UK does not buy a large share of oil or gas directly from the Gulf, global energy markets are extremely sensitive. A disruption in supply from the region would cause oil and gas prices to surge on international markets. That would feed through to UK fuel prices, electricity generation costs, and ultimately to the cost of goods and services.

Households would feel the pinch at the petrol pump and through higher heating bills. Businesses would face increased production and transport costs. Sectors such as food, manufacturing, and logistics, all of which rely on energy-intensive processes or imported inputs, could see margins squeezed or operations disrupted.

With inflation already proving stubborn, a sudden energy price shock could reverse recent progress and prompt the Bank of England to hold or even increase interest rates. That would add to borrowing costs, slow consumer spending, and potentially delay investment decisions by UK firms.

How UK businesses can respond now

While the exact course of events cannot be predicted, businesses can take practical steps now to reduce their exposure to external shocks like this one.

1. Review and diversify supply chains
   Look for alternatives to suppliers or routes that may be affected by increased shipping costs or delays. Building in more resilience can help ensure continuity.
2. Lock in energy contracts
   Businesses should explore fixed-price energy contracts or forward purchasing arrangements where possible. This can cap exposure to sudden cost spikes.
3. Build working capital reserves
   Improving cash flow and keeping a buffer in reserve will help businesses weather a temporary period of higher costs or slower trading.
4. Increase pricing flexibility
   Firms should assess where modest price rises might be accepted by customers if energy-related costs go up and have plans ready.
5. Monitor geopolitical and market signals
   Keeping informed of developments in the region and commodity markets allows for quicker reactions and better-informed decisions.

Conclusion

The UK may not be on the frontline of Middle Eastern tensions, but it is firmly within the economic blast radius of any disruption to global energy flows. With risks like a Strait of Hormuz closure hard to predict but potentially severe, sensible preparation is not alarmist, it is strategic. Businesses that plan ahead are more likely to stay resilient, competitive, and in control, whatever the headlines bring.

For many business owners, the daily focus is on growth, sales, staff, and operations. Planning an exit often sits far down the priority list, something to deal with “one day.” However, failing to plan for how and when you will eventually leave your business can result in missed opportunities, lost value, and unnecessary stress. Whether you plan to sell, pass the business to family, or simply wind it down, an exit plan is essential.

Protecting and realising value

Your business is likely one of your most valuable assets. Without a clear exit strategy, it can be difficult to extract its full value when the time comes to leave. A good plan will help you tidy up financial records, secure long-term contracts, strengthen leadership, and ensure systems are in place that make the business more attractive to buyers or successors.

Exit planning can also highlight areas where value is currently locked in, for example, if too much of the business depends on you personally. By addressing these issues early, you make the business more stable and reduce risk for future owners.

Avoiding disruption and stress

Unexpected life events such as illness, family changes, or economic shifts can quickly bring about the need to exit the business. If you are unprepared, this can lead to hurried decisions, disputes, or financial shortfalls. A well-considered plan helps you stay in control, even if circumstances change suddenly.

It also protects employees, customers, and suppliers. Knowing there is a continuity plan in place builds confidence and ensures that the business can continue running smoothly during a transition.

Tax and legal efficiency

Leaving a business has tax consequences, whether through Capital Gains Tax, Inheritance Tax, or income withdrawals. Exit planning gives time to structure the business in a tax-efficient way, perhaps by using Business Asset Disposal Relief, family trusts, or share restructures. Legal aspects such as shareholder agreements, wills, and powers of attorney should also be reviewed and aligned with your plans.

Without forward planning, you may face higher tax bills or delays in transferring ownership.

Clarity of purpose and timing

Even if you love what you do, there will come a time when you want to slow down or move on. Setting a clear goal and timeframe helps guide business decisions. For example, if you want to sell in five years, you might focus on building recurring income, diversifying your customer base, or reducing reliance on key individuals.

It also helps family members or co-owners understand your intentions. This avoids conflict later and allows others to plan their own roles accordingly.

Conclusion

Exit planning is not just about leaving, it is about shaping the future of your business and ensuring that the rewards of your hard work are protected. By starting early, you give yourself time to increase value, reduce risk, and leave on your own terms. A professional adviser can help you map out the right strategy and keep it under regular review. The best exits are planned, not improvised.

At a time when many UK businesses are focusing on recovery, growth, and future planning, a wave of new geopolitical unrest is casting a long shadow over economic stability. In recent months, tensions have intensified globally, with the conflict between Iran and Israel drawing new international concern. Combined with ongoing instability in Ukraine, continued fallout from supply chain disruptions, and rising protectionist policies, the effect on the global economy is becoming harder to ignore.

While these events may seem distant, the consequences are likely to be felt much closer to home, including by small and medium-sized businesses across the UK.

Rising energy and commodity prices

The Middle East remains a critical source of the world’s oil and gas. Any escalation between Iran and Israel risks disrupting key shipping routes or oil production infrastructure. This uncertainty alone is often enough to drive up energy prices. As we have seen in previous global tensions, such price rises quickly feed through to higher transport, logistics, and production costs. For many UK businesses, particularly in manufacturing, construction, and food distribution, this can put already thin margins under further strain.

Currency fluctuations and investor unease

Periods of global instability tend to trigger cautious behaviour from international investors. This often results in sharp movements in exchange rates as funds are pulled from riskier markets. For UK importers, a weakening pound means that goods sourced from abroad become more expensive. Exporters might benefit in the short term, but volatility makes forward planning much more difficult. Businesses with overseas suppliers or clients may need to reassess pricing models, supply agreements, or risk management strategies.

Wider inflationary pressure

The lingering effects of the pandemic, Brexit-related disruption, and the Ukraine war had already set inflation on an upward path. Renewed conflict in the Middle East could keep inflation higher for longer by extending global supply chain difficulties and feeding further energy and food price increases. If inflation persists, businesses may face further interest rate increases, adding to the cost of borrowing and slowing down consumer demand.

What action can businesses take?

While UK firms cannot influence global events, they can take sensible steps to build resilience. Reviewing cost structures, securing supply chains, planning for currency swings, and building up cash reserves are all prudent measures. Speaking to your accountant about stress testing and scenario planning may also be worthwhile in today’s uncertain environment. 

Preparation is not panic; it is good governance.

The government has confirmed that Winter Fuel Payments will return for the 2025-26 season, providing much-needed support for pensioners facing rising energy bills. This marks a reversal of last year’s controversial decision to suspend the payments and reflects growing concern over the impact of winter costs on older households.

The scheme will apply to all individuals who reach State Pension age by the qualifying week, which runs from 15 to 21 September 2025. Pensioners with annual income of £35,000 or less will receive the full Winter Fuel Payment automatically. The standard payment is £200 per household, rising to £300 for households where one or more residents are aged 80 or over.

Those with income above £35,000 will still receive the payment initially, but the amount will be reclaimed through the PAYE system or Self-Assessment. There will also be an option for higher earners to opt out of receiving the payment altogether.

Around nine million pensioners are expected to qualify under the revised scheme. The cost to the Exchequer is estimated at £1.25 billion, though the means-testing element is expected to save around £450 million when compared to the previously universal model.

The government has described the decision as a fair and responsible approach, striking a balance between offering meaningful help to those most in need while limiting costs at a time of budget constraints. The policy has also been shaped by public pressure and advocacy from pensioners’ organisations who raised concerns following last year’s cuts.

Further details about how the scheme will operate, including how individuals can opt out or confirm their eligibility, will be released later in the summer. The Winter Fuel Payment will continue to be managed by the Department for Work and Pensions and paid out automatically to eligible individuals.

For pensioners and their families, this is welcome news ahead of what could be another expensive winter. For advisers and accountants, this is a useful moment to check clients’ entitlements and ensure they are aware of the available support.

If you work with older clients or those approaching retirement, now is the time to prepare for discussions about eligibility, tax implications for higher earners, and the benefits of opting in or out. The Autumn Budget is expected to confirm the funding arrangements in full.

Artificial intelligence (AI) is no longer just a concept for the future. It is already reshaping how accountancy services are delivered, and these changes are starting to benefit businesses of all sizes. As your accountant, we want to explain what these developments mean in practice and how they can help you.

What is changing in accountancy?

AI is helping us work more efficiently by automating routine, time-consuming tasks like data entry, invoice matching, and bank reconciliation. This means we can spend less time on admin and more time supporting you with planning, decision-making, and spotting risks early.

AI can also scan thousands of transactions in seconds and help identify unusual patterns or errors that could otherwise go unnoticed. These systems are not replacing people – they are enhancing the way we work and enabling us to offer you better value.

What does this mean for you as a client?

• Faster turnaround times – AI helps us process data more quickly and accurately, so you receive reports and accounts sooner.
• Fewer mistakes – Automated checks reduce the risk of errors, giving you confidence in the numbers.
• Better advice – With less time spent on manual tasks, we can focus on helping you grow your business and improve profitability.
• Stronger fraud protection – AI tools can spot unusual transactions or irregularities, supporting better financial control.

AI is not replacing your accountant

While the technology is improving rapidly, it cannot replace human judgement. What it does is give us better tools to interpret the numbers, explain trends, and help you make sound decisions. Our role remains firmly centred on giving you clear, practical advice based on your business needs.

We are using AI to work smarter for you

We are already adopting AI-based tools behind the scenes. This includes automation in bookkeeping and VAT returns, as well as smarter forecasting tools to help you plan ahead. You will continue to receive the same personal service, just with added speed, accuracy and insight.

Looking ahead

If your business is beginning to explore AI in its own operations, there may also be a need for external assurance – especially if you are using AI in areas like customer service, marketing, or data analysis. Larger companies are already undergoing checks to show that their AI systems are reliable and fair. These types of services will become more common, and we can support you in this area as well.

Need help making sense of it all?

We are here to help you understand what these changes mean and how to use them to your advantage. Whether you are a sole trader, a growing company, or a well-established business, our goal is to make sure you benefit from the latest tools and stay one step ahead.

Get in touch if you would like to explore how our AI-enabled tools can improve the way you run your business.

From April 2025, significant new legal obligations have come into force that will affect almost all UK companies and LLPs. Under the Economic Crime and Corporate Transparency Act 2023, Companies House has started to roll out mandatory identity verification for individuals involved in the formation, ownership, and control of UK-registered entities.

This is part of a wider drive to increase transparency, clamp down on fraudulent company activity, and prevent the misuse of UK corporate structures.

If you are a company director, a person with significant control (PSC), an LLP member, or someone involved in forming a company, these new rules are directly relevant to you.

Who must be verified?

The identity verification requirement applies to a broad range of individuals connected with UK corporate entities, including:

• Company directors (for companies registered in the UK)
• Persons with Significant Control (PSCs)
• LLP members
• Individuals forming new companies or LLPs
• Authorised agents (known as Authorised Corporate Service Providers or ACSPs)

Over time, the requirement will extend to all existing individuals in these roles. For now, it applies to any new appointment or registration made from 8 April 2025.

What is identity verification?

Verification involves confirming that a person is who they claim to be. This process must be completed through one of two routes:

1. Directly through Companies House, using a secure digital system that checks photographic ID and confirms key personal information.
2. Via an Authorised Corporate Service Provider (ACSP) – such as your accountant or solicitor – who is registered with Companies House to conduct identity checks on behalf of clients.

Only once an individual has been verified will Companies House allow them to act in their appointed role or be added to a company’s public register.

Why has this change been introduced?

The government is strengthening the role of Companies House to prevent the use of fake identities and nominee directors. Historically, it has been possible to incorporate companies with limited scrutiny of those involved. This reform aims to create a more trustworthy business environment and help law enforcement tackle fraud and economic crime.

What should companies do now?

If you are responsible for a company or LLP, it is important to act early:

• Review your existing PSCs and directors to confirm who will need to be verified
• Ensure any new appointments from April 2025 onwards complete identity verification promptly
• Discuss with your accountant or legal adviser how to manage verification – either directly or via an ACSP

Failing to comply with the rules could result in the rejection of company filings or even criminal penalties. Only verified individuals will be able to act in their roles, and unverified appointments may be invalid.

How we can help

As an authorised agent, we can conduct identity verification checks for your company or LLP. This service ensures compliance with the new rules and avoids the administrative burden of managing the process internally.

If you have any questions about how these changes affect your business or would like to arrange for us to complete identity checks on your behalf, please get in touch. We are here to help you stay compliant and informed.

Small and medium-sized hospitality businesses across the UK are set to benefit from a new government-backed scheme designed to cut energy costs and support net zero ambitions. The initiative, unveiled as part of the wider Plan for Change, will provide free energy and carbon reduction assessments to over 600 venues, including pubs, caf�s, restaurants, and hotels.

Delivered in partnership with Zero Carbon Services, a sustainability consultancy specialising in hospitality, the scheme aims to deliver more than £3 million in cost savings while reducing carbon emissions by approximately 2,700 tonnes. The initiative is part of the government’s commitment to making the UK’s hospitality sector more sustainable and economically resilient.

The hospitality sector, which includes a high number of independent and family-run businesses, plays a vital role in communities and the broader economy. It currently supports around 3.5 million jobs and contributes over £90 billion annually to the UK economy. However, rising energy prices and the pressure to become more environmentally responsible have placed significant strain on many operators.

The trial will identify practical, low-cost opportunities for energy reduction, such as sealing insulation gaps, switching to low-energy lighting, and adjusting heating systems. These changes may seem minor in isolation, but together they could deliver substantial savings and operational efficiencies.

Sarah Jones, Minister for Industry, emphasised that the government is backing the hospitality sector to thrive in a greener future. She noted that energy efficiency is not only good for the planet but also allows businesses to reinvest savings into growth, staffing, and service improvements.

Mark Chapman, Chief Executive of Zero Carbon Services, highlighted that extreme weather and climate-related pressures are already affecting the hospitality industry. From food supply disruptions to fluctuating energy demands, the sector is under increasing pressure to adapt. He pointed out that many businesses are unaware of simple, actionable steps they can take to reduce energy use and cut costs, which this new scheme is designed to address.

Trade bodies have responded positively. UKHospitality welcomed the move, saying that businesses are increasingly looking for ways to reduce emissions and become more sustainable. The British Beer and Pub Association added that the guidance and insights from the trial would be particularly valuable to small pubs trying to manage energy bills. The British Institute of Innkeeping echoed these sentiments, noting that energy costs remain a key concern for licensees and any support is timely and welcome.

The trial will run until March 2026, supported by £350,000 of government funding. It aims to create a model that could potentially be rolled out more widely across the sector. One of the added benefits is that the initiative helps to bridge the knowledge gap among business owners. While many hospitality operators want to reduce their environmental impact, only a small proportion feel confident enough to act without external support.

By connecting these businesses with trusted advisers and providing tailored assessments, the scheme hopes to remove the barriers that often prevent sustainable change.

For firms in hospitality, this is not only a cost-saving opportunity but a clear signal that environmental efficiency is fast becoming a core business strategy.