2025 Government Reforms: Increased HLS Payments for Farmers and Easier Planning Rules for Small Housebuilders

Here’s our round-up of this week’s key business news.

If you’d like to discuss how any of these topics may affect your business, please don’t hesitate to contact us. We’re here to help.

When is diversification a good business strategy?

We often hear the phrase “don’t put all your eggs in one basket” and it’s particularly relevant to business owners.

In the UK, many farmers are already adopting this approach. Faced with unpredictable weather, shifting regulations, and price pressures, nearly three-quarters of farmers now run a non-farming business alongside their primary activity—these range from glamping and weddings to beauty services.

This kind of thinking applies far beyond agriculture. When your main income stream becomes uncertain, diversification can help protect and even grow your business.

What does diversification mean in practice?

Diversification involves developing other ways to earn income that don’t rely on your primary product or service. Some examples include:

• Renting out unused space or tools
• Offering new services to your existing customer base
• Applying your core skills to a new market
• Turning a passion project or hobby into a sideline
• Launching an online product or subscription

When done well, diversification spreads risk, strengthens resilience, and opens up new opportunities.

When should you consider it?

You might want to diversify if:

• Your income is seasonal or unpredictable
• You have unused resources (space, equipment, skills)
• Customer habits are changing
• You’ve spotted unmet demand
• You rely too heavily on one client or industry

What to watch out for

• Start small – test new ideas before making significant investments
• Build on what you already know and own
• Be realistic about the effort and cost involved

Final thought

Diversification isn’t about chasing trends – it’s about strengthening your business. In uncertain times, exploring new income streams can make all the difference.

Need help assessing your options? We’re happy to chat through the best strategy for your business.

IMF upgrades UK growth forecast: steadier ground ahead?

The International Monetary Fund (IMF) has issued a more positive outlook for the UK economy than previously expected.

It now predicts growth of 1.2% in 2025 – a modest figure but an upgrade nonetheless. The IMF says:

“An economic recovery is underway.”

What does this mean for businesses?

While the UK isn’t heading for a boom, this signals a more stable environment for business planning. It follows a tricky period of high inflation (3.5% as of April) and slow growth.

The IMF also endorsed the government’s fiscal plan, describing it as a fair balance between promoting growth and maintaining fiscal responsibility.

How might this impact your business?

A more positive outlook can boost investor confidence and consumer sentiment, both of which can lead to increased demand. It may also influence lending conditions and interest rates.

The full IMF report is expected to be released later this summer. For now, businesses can take some encouragement from this shift.

Would you like to review your 2025 forecasts? Book a free consultation to review your budgets and growth strategy.

See: https://www.imf.org/en/News/Articles/2025/05/27/cs-uk-aiv-2025

FSB updates guidance on Employers’ Liability insurance

The Federation of Small Businesses (FSB) has issued updated guidance on Employers’ Liability (EL) insurance—a key legal requirement for many small companies in the UK.

If you employ staff—even part-time, seasonal or volunteers—chances are, you’re legally required to have this insurance.

Why does it matter?

This cover protects you if an employee is injured or becomes ill because of their work—and you’re found responsible.

The FSB gives examples such as:

• Injuries involving workplace machinery
• Office workers developing repetitive strain injuries
• Site accidents involving falls or manual handling

Without EL insurance, you could face legal claims and large payouts. Some cases cost tens of thousands in compensation and legal fees.

The rules in brief:

• Legal minimum cover is £5 million
• Most policies provide £10 million as standard
• Failure to hold a valid policy can result in a fine of £2,500 per day
• Not displaying your certificate may lead to a £1,000 fine

There are a few exceptions—like if you’re a sole trader with no staff or only employ close family—but these are rare.

The updated FSB guidance is a good opportunity to double-check that your insurance coverage is up to date and meets the legal requirements.

You can find the full guidance on the FSB website.

Bonus as salary or dividend: which pays off?

If you’re a company director, you may be wondering whether to accept a bonus as an additional salary or as a dividend.

Each option has tax and cash flow implications – and the best choice depends on your circumstances.

Taking salary: the pros and cons.

A salary bonus is taxed through PAYE, and both the employee and employer pay National Insurance.

On the plus side, it can enhance your state pension record, improve your borrowing capacity, and contribute toward workplace pensions.

However, it may push you into a higher tax band, especially if your salary is already near the threshold.

Taking a dividend: the pros and cons.

Dividends are usually more tax-efficient. They’re not subject to National Insurance, and tax is only payable after your dividend allowance and personal allowance have been used.

The catch? You can only pay dividends out of company profits after corporation tax, and the dividend allowance is now just £500.

So, what’s the answer?

Often, a combination of salary and dividends yields the best results.

We can help you determine the most tax-efficient approach, taking into account your total income, tax bands, allowances, and company profits.

Planning to withdraw profits? Book a free consultation and let us run the numbers and help you decide the best route for your situation.

Why you shouldn’t ignore old tech: new guidance from the NCSC

The National Cyber Security Centre (NCSC) has issued fresh guidance on how to retire old devices, software, and systems—known as “decommissioning.”

This advice is primarily intended for IT professionals, but it also contains key lessons applicable to any small business.

Why it’s important

Old systems can pose serious security risks. Even when they’re no longer in use, outdated devices might:

• Hold sensitive business or customer data
• Still, connect to your network or the internet
• Be more vulnerable to cyberattacks or malware

What does the NCSC recommend?

• Plan: When upgrading, plan how you’ll decommission the old system
• Maintain an inventory: Keep track of all devices and software, even if they’re no longer in use
• Securely erase data: Don’t just delete files—use secure deletion or physical destruction
• Review access: Remove accounts and permissions linked to outdated systems
• Don’t delay: Even unused devices can still pose a threat

What can you do today?

Take 10 minutes to list all devices, software, and cloud services you no longer use. You may find surprising vulnerabilities in things you’ve forgotten about.

You can find more detail on the NCSC website if you’d like to explore further.

£30 Million Boost to HLS Payments: What It Means for Your Farm

Farmers across England will see a significant increase in Higher Level Stewardship (HLS) payments starting January 2025, with a £30 million uplift in funding. This means your ongoing efforts to care for the environment and preserve the countryside could bring in even greater financial rewards.

Beginning 1 January 2025, payment rates will be increased across 157 HLS options.

The goal is to value better the contributions farmers make to protecting rare wildlife, restoring natural habitats, and preserving traditional rural landscapes. It also aims to align HLS payments more closely with those provided under Environmental Land Management (ELM) schemes.

If you’ve already signed up for an HLS agreement, there’s no need for action, the increased rates will be applied automatically, with payments expected to be issued from December 2025.

If you’re unsure how these updates might affect your current agreement or are considering joining an environmental scheme, please don’t hesitate to contact us, we’re happy to assist.

For the full breakdown of HLS payment rates starting 1 January 2025, see here:

Changes to Planning Rules Could Make Life Easier for Small Housebuilders

The government has announced a series of proposed changes to help small and medium-sized housebuilders overcome delays and challenges in the planning process. If you’ve ever felt stuck navigating lengthy red tape for a small-scale development, these changes could be welcome news.

What’s Changing?

Currently, small developments of around 10 homes often face the same complex planning hurdles as much larger sites. The proposed reforms aim to streamline this process.

Key proposals include allowing smaller developments (up to nine homes) to be approved more quickly by planning officers without requiring a full planning committee review. Some biodiversity requirements will also be eased, reducing costs and red tape.

For mid-sized sites (10 to 49 homes), a new “medium” category is being proposed. These may be exempt from certain obligations, such as the Building Safety Levy, and are subject to simplified biodiversity rules.

What Else Is on Offer?

The government is also planning wider support to improve access to land and finance for small builders. Initiatives include:

• Releasing more land via Homes England tailored for smaller developers.
• Launching a National Housing Delivery Fund to boost long-term financing options.
• Offering £100 million in SME Accelerator Loans through the Home Building Fund to support growth.
• Piloting a new project in Bristol, Sheffield, and Lewisham to unlock complex plots of land, aiming to increase affordable housing delivery.

Councils will also receive additional funding to expedite environmental assessments and support innovation in small-scale site delivery. A consultation is underway to reform how planning committees operate.

What Does This Mean for You?

If you’re running a smaller development firm, this could translate into:

• Faster planning approvals, especially for small-scale builds.
• Lower costs and fewer regulations on biodiversity and safety levies.
• New opportunities to develop plots previously considered financially unfeasible.

That said, the impact will depend on how local authorities implement these changes and how easily the new funding becomes accessible.

What You Might Want to Do Next

It may be time to revisit sites you previously put on hold, they might now be more viable with relaxed planning requirements.

You should also evaluate your financial position to prepare for new development opportunities. Consider:

• Reviewing current credit and borrowing arrangements.
• Determining if you’ll need additional capital to get projects off the ground.
• Checking your eligibility for programmes like the SME Accelerator Loans.

Being financially and administratively prepared, with up-to-date accounts, business plans, and potential development sites, can help you act quickly as new opportunities arise.

If you’d like guidance on how these planning updates might affect your business or want help reviewing your development finance options, don’t hesitate to get in touch.

See:

https://www.gov.uk/government/news/government-backs-sme-builders-to-get-britain-building