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2025 Tax Changes Are Impacting UK Business Owners

17/4/2025

 

HOW Business Owners Can Stay Ahead in 2025

​The UK’s tax and accounting landscape in 2025 brings challenges for business owners - particularly with increased HMRC scrutiny, rising corporation tax rates, and upcoming Making Tax Digital (MTD) deadlines. These shifts mean it's more important than ever to have proactive financial strategies in place.

Key Risks in 2025:

Corporation tax up to 25% for profits over £250,000;

MTD for Income Tax starting April 2026—early prep needed;

Increased HMRC investigations into small businesses;

Rising costs and tighter cash flow post-inflation and higher interest rates.

Case Study: Managing Risk for a Growing Consultancy

A South London consultancy with £400,000 annual turnover and rising profits was suddenly pushed into the 25% corporation tax bracket. Their records were spreadsheet-based, leaving them unprepared for MTD compliance.

We implemented a cloud accounting system, restructured director remuneration to lower taxable profit, and initiated quarterly tax planning reviews. This not only made them MTD-ready but saved them £12,000 in tax annually, while improving cash flow forecasting.

Advisory Action Plan:

Move to digital accounting systems now;

Review tax efficiency of salary/dividend mix;

Use pension contributions or capital allowances to lower taxable profits;

Schedule quarterly reviews with your accountant.

Worried about 2025 tax changes? Let's build a plan that protects your business and your bottom line.


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