Navigating Key Business Changes: Inflation, Tax Planning & Compliance Updates

Welcome to our latest monthly newswire!

We hope you find this newsletter helpful and informative. If you want to discuss any issues further, please contact us. We’re here to help!

Inflation Falls to 2.5% – What This Means for Your Business.

Official figures released in January reveal that UK inflation fell slightly in December, down to 2.5% from 2.6% in November.

While the drop is marginal, it has sparked discussion in the press about whether this easing of inflation might prompt the Bank of England to consider cutting interest rates when it meets on February 6th. At the same time, many businesses are expected to raise prices in the coming months due to increased payroll costs set for April. This could cause inflation to climb again.

Here, we explore some key issues you should be aware of.

Potential Interest Rate Cuts: A Relief for Borrowers?

If you already have a loan or are considering borrowing for expansion, a rate cut that leads to a reduction in interest rates could lower your financing costs and improve cash flow.

Even if no interest rate cut happens in February, confidence in the financial markets over future rate movements can work in your favour.

However, it’s important to remain cautious—any rate cuts are speculative at this stage and dependent on further economic data. The Bank of England has demonstrated a cautious approach to reducing rates, and inflation is still above their 2% target.

Plan for multiple scenarios—seeking advice on strategically managing business debt may be a good idea.

Upcoming Cost Pressures in April

While lower inflation is welcome news, costs will continue to rise in 2025. Payroll costs will be particularly affected.

• The National Living Wage and National Minimum Wage are set to rise in April, directly impacting payroll costs, especially for hospitality, retail, and care businesses.
• January is traditionally a quiet month for hospitality businesses, which may heighten concerns about business performance in the year ahead.
• Employer National Insurance Contributions (NICs) will also increase while the NIC threshold is reduced, further squeezing profit margins.

If you operate on thin margins, these increases could severely strain your business. Now is the time to:

• Reassess your cost structures

• Consider your pricing strategy

• Improve efficiency

• Explore ways to remain competitive

What Should Business Owners Be Thinking About?

• Cash Flow Management – Understanding cash flow is critical when costs are changing. Accurate forecasting will help ensure your business can meet obligations while still investing for the future.

• Pricing Strategy – Raising prices is one way to deal with increased costs, but passing costs on to customers requires a careful balance. Strategic planning can help minimise resistance.

• Efficiency Improvements – Investing in technology or streamlining processes can help offset rising costs. For example, automation tools could reduce administrative expenses and boost productivity.

• Workforce Planning – The wage increases will have a financial impact. Understanding how much extra you’ll be paying will help you prepare. Reviewing staffing levels may also help identify areas where savings can be made.

Stay Prepared – We’re Here to Help

The fall in inflation is a positive development, but businesses cannot afford to become complacent. Planning and preparation are key, with wage increases and higher employer contributions on the horizon.

Need help with:

• Financial planning & cash flow forecasting?
• Cost management & efficiency reviews?
• Wage planning or tax & National Insurance advice?

Book a free meeting with us today! By working with us, you’ll gain the insights and strategies to navigate these changes confidently and position your business for long-term success.

New Safety and Security Declaration Requirements – Are You Ready?

From January 31st 2025, entry summary declarations will be mandatory for all goods imported into Great Britain (GB) from the EU. This extends the existing requirements that already apply to:

• Imports from non-EU countries into GB
• Exit summary declarations for exports to the EU

What’s Changing?

Reduced Data Requirements:

To ease the burden on businesses, HMRC has simplified the safety and security declaration process:

• 20 mandatory fields (always required)
• 8 conditional fields (required in specific cases)
• 9 optional fields (can be completed if relevant)

If you’re already submitting safety and security declarations, you don’t need to change your current systems, but you may benefit from the simplified requirements.

Who is Responsible?

Carriers and hauliers are legally responsible for submitting these declarations. However, in some cases, the importer or an intermediary may need to lodge the declaration.

Action for Importers: If you import goods from the EU, check with your carrier and supplier to confirm who is responsible and determine the best submission method.

How to Submit Entry Summary Declarations

Declarations must be submitted through HMRC’s Safety and Security Great Britain (S&S GB) IT platform.

What You Need to Register:

• Government Gateway account
• Great Britain Economic Operators Registration and Identification (EORI) number
• Compatible software (there is no direct submission option)

Need More Information?

For complete HMRC guidance, check their website here.

Contact us today if you need help understanding your obligations or setting up the required systems!

Crackdown on Right-to-Work Checks – Are You Compliant?

Immigration enforcement is tightening – is your business prepared? Failing to conduct proper right-to-work checks could result in fines of up to £60,000 per worker, reputational damage, and even criminal charges.

What’s Happening?

Targeted Sectors: Immigration enforcement teams are cracking down on industries with high risks of illegal employment, including:

• Car washes
• Nail bars
• Supermarkets
• Construction sites

Recent Figures (July–November Last Year):

• Thousands of business inspections across the UK
• 770 arrests in London alone
• Nearly 1,000 premises inspected

Employers found hiring workers without the legal right to work face heavy penalties.

How to Stay Compliant

• Check original documents – Verify passports, visas, or other approved documents proving a worker’s right to work.
• Confirm authenticity – Ensure documents are genuine, belong to the individual, and have not expired.
• Keep records – Store copies of documents (including verification date) for at least two years after employment ends.
• Use the Home Office online service – The Home Office’s digital right-to-work checking service makes verification easier for non-UK nationals.

Need More Guidance?

If you’re unsure whether your business is fully compliant, contact us today for expert advice!

Why You Should Prioritise Tax Planning Before the Tax Year Ends

Save Tax & Improve Your Cash Flow

With the UK tax year ending on April 5th, now is the perfect time to review your finances and maximise tax-saving opportunities—especially if you’re self-employed. Proactive tax planning can:

• Reduce your tax liabilities
• Boost your cash flow
• Strengthen your financial position

Key Tax-Saving Opportunities

• Capital Allowances – If you’ve invested in equipment, vehicles, or machinery, you may qualify for tax relief under the Annual Investment Allowance (AIA). Reviewing purchases before April 5th ensures you don’t miss out on valuable deductions.
• Pension Contributions – Paying employee or director pensions before the deadline can lower your taxable profit and enhance employee loyalty.
• R&D Tax Relief – If your business has engaged in innovation, you could qualify for Research & Development (R&D) tax credits, providing significant savings.

Act Now & Save More

A little planning now can prevent costly mistakes later. Why not schedule a quick review to ensure you’re taking full advantage of all tax-saving opportunities?

Get in touch today!

Three Business Rates Agents Suspended – Businesses Urged to Be Cautious

The Valuation Office Agency (VOA) has suspended three business rates agents following a potentially serious breach of agent standards:

• Rateable Value Experts – Suspended on January 2nd
• Re-Rates UK – Suspended on January 2nd
• Rate Masters Limited (trading as ‘My Rates’) – Suspended on January 22nd

The VOA has not disclosed specific reasons but confirmed they are conducting an ongoing investigation. While the suspension is in place, the VOA will not accept any information from these agents, potentially causing delays and issues for affected businesses. Customers represented by these firms should have received a notice from the VOA.

How to Stay Safe from Unreliable Agents

The VOA warns businesses to be cautious of agents who:

• Pressure you into signing contracts or making quick decisions.
• Claim to represent the VOA or forward emails supposedly from the VOA.
• Demand large upfront payments.
• Make misleading claims about ‘unclaimed credits’ or similar.

Reminder: You don’t need an agent to manage your business rates. The VOA provides a free online service where you can check and challenge your rateable value yourself.

If you choose an agent, always select one carefully using the VOA’s official checklist rather than allowing an agent to approach you.

For more information, visit the VOA’s website.