How Accountants Can Help Your Business Thrive Amid Labour's Tax Hikes

As independent firm of chartered accountants, we understand the increasing pressures businesses face following the recent tax changes.  In this blog, we share our expertise and outline some practical strategies that businesses can take to navigate these changes. 

Assess the Financial Impact of Tax Changes

The first thing is to understand the changes and how they could impact your business:

• National Insurance Contributions (NICs)  increase by 1.2% – From 6 April 2025:  Higher employer NICs will increase payroll costs, particularly affecting businesses with larger workforces. The lower threshold means NICs will be due on a greater proportion of employees’ wages, further raising costs. 
• Capital Gains Tax (CGT) changes:  Businesses considering selling assets, shares, or property will face higher tax liabilities. From 30 October 2024, the lower CGT rate will rise from 10% to 18%, and the higher rate from 20% to 24%. Carried interest CGT rates will increase from 10% and 28% to 32% (April 2025) and 36% (April 2026) and business asset disposal relief and investors’ relief CGT rates will increase to 14% (April 2025) and 18% (April 2026).
• Inheritance Tax (IHT) changes:  Business owners planning to pass down assets must reassess succession planning, as inherited business and agricultural assets may now be taxed at 20% if above the new threshold (£1m). 

We can conduct a financial health check to help you understand how these changes might impact your business and identify where adjustments in your business operations could be made.

Streamlining Costs Without Sacrificing Quality

Cost savings are one of the first thoughts for companies experiencing heightened taxes. Some areas to consider are:

• Energy consumption: Installation of energy-saving measures that can bring utility bills down 
• Automation and Technology: Tools such as Xero and AI related software for automated financial jobs can reduce admin time
• Outsourcing: Reconsider all non-key business activities 

We can provide a voluntary audit to analyse your operations to find inefficiencies and recommend cost-saving measures that meet your business goals. With our support, you can easily implement these strategies without compromising quality or productivity.

Tax Optimisation Strategies

Many businesses do not take full advantage of the available tax reliefs which can help reduce your liabilities. You should consider:

• R&D tax credits: Available for businesses investing in innovation. Check if you can claim Research & Development (R&D) tax relief. 
• Capital allowances: Reliefs for purchasing equipment or assets. Find out what you may be able to claim to reduce a tax bill.
• Grants and incentives: These can reduce upfront costs for training or green initiatives. Find government grants

For some businesses, restructuring or incorporating can have significant tax benefits. For example, converting from a sole trader to a limited company may reduce personal tax liabilities and provide asset protection.

We can complete a detailed tax review to ensure you have claimed all available reliefs and operate the most tax-efficient structure. We have great experience in guiding businesses through the intricacies of UK tax legislation while staying compliant but also minimising liabilities.

Cash Flow Improvement

Good cash flow is integral to any business. Using forecasting tools, we are well-placed to assist you to:

• Anticipate periods of high expenditure
• Plan well in advance for tax payments.
• Ensure adequate working capital for operational expenses.

Our experts offer bespoke cash flow forecasting and provide actionable insights. We monitor your situation to ensure stability in your financial position, even in the most turbulent of times.

Plan for the Future 

Succession planning is more critical today than it has ever been because of high levels of taxation. Poorly planned transitions in ownership can result in an unwarranted burden of inheritance tax or capital gains tax.

We specialise in creating succession plans tailored to your business structure. From minimising tax implications to ensuring business continuity, we'll guide you every step of the way.

Why Work with Us?

Navigating ever-increasingly complex tax changes can be overwhelming; you don't have to face it alone. At Wright Vigar, years of expertise blend with an in-depth understanding of UK tax legislation to create tailored solutions for your business. Whether this is a case of maximizing your tax position, preserving cash flow, or preparing for the future, our team will guide and support you through every step.

Recent tax changes might seem daunting, but with the right strategies in place and professional advice, your business can adapt and thrive. 

Key Takeaways:

• Assess how tax changes impact your business and take proactive steps to adapt.
• Streamline costs and embrace automation for operational efficiency.
• Leverage available tax reliefs and grants to minimise liabilities.
• Strengthen cash flow management to maintain financial stability.
• Partner with expert accountants for tailored advice and long-term planning.  

Ready to take control of your business finances? Contact Wright Vigar today for a free consultation and let us help you navigate Labour’s tax hikes with confidence.