Late payment has long been one of the greatest challenges facing small businesses. Many profitable businesses experience unnecessary financial pressure simply because customers take longer than agreed to settle their invoices. When cash is tied up in unpaid debts, it becomes harder to pay suppliers, invest in growth or even meet tax liabilities on time.

The Government has recently outlined further plans aimed at improving payment practices and strengthening support for smaller businesses. While many of the proposals are still subject to legislation, they indicate a clear intention to encourage larger organisations to pay their suppliers more promptly and to provide greater protection for SMEs.

What does this mean in practice?

Although the reforms are welcome, businesses should not rely on legislative changes alone to solve cash flow problems. Good credit management remains essential and can often make a greater difference than changes in the law.

There are a number of practical steps every business should consider.

Review your payment terms

Ensure your terms and conditions are clearly stated on quotations, contracts and invoices. If you currently offer 60-day payment terms as standard, consider whether a shorter period would be appropriate.

Invoice promptly

Delays in raising invoices inevitably delay payment. Wherever possible, invoices should be issued immediately after goods are supplied or work is completed.

Follow up overdue accounts

Many businesses hesitate to chase overdue debts for fear of upsetting customers. However, a polite reminder shortly after the due date often results in prompt payment. Having a structured credit control procedure helps remove the emotion from the process.

Monitor debtor days

Review the average time customers take to pay each month. If debtor days are increasing, investigate the reasons before the problem becomes serious.

Know your largest risks

If a significant proportion of your income comes from one or two customers, a delay in payment could have a major impact on your business. Consider whether your customer base is sufficiently diversified.

Maintain accurate cash flow forecasts

Regular cash flow forecasting allows potential shortfalls to be identified early, giving more time to arrange finance or reduce expenditure if necessary.

How we can help

Cash flow problems rarely develop overnight. They usually arise from a combination of slow-paying customers, rising costs and inadequate financial monitoring. We can help you analyse your working capital, review your credit control procedures and identify practical ways to improve cash flow before problems become critical.

Good cash flow management remains one of the most effective ways of protecting the long-term success of any business. Whatever changes are introduced by the Government, businesses that actively manage their cash flow will continue to place themselves in the strongest financial position.

Before a property development even begins, significant costs are often incurred. Planning applications, architects’ drawings, engineering reports, environmental surveys and legal advice can all generate substantial expenditure long before construction starts.

HMRC has launched a consultation examining whether the current tax treatment of these pre-development costs remains appropriate and whether changes could help encourage investment.

What are pre-development costs?

Pre-development costs are expenses incurred before physical work begins on a development project. They may include:

� Architectural and design fees.

� Planning application costs.

� Site investigations and surveys.

� Environmental assessments.

� Legal and professional fees.

� Feasibility studies.

These costs are often unavoidable, yet the tax treatment can sometimes be uncertain depending on the nature of the project and the business involved.

Why is the Government consulting?

The Government wants to understand whether the existing rules discourage development or create unnecessary complexity.

Businesses have argued that uncertainty over whether certain costs qualify for tax relief can make investment decisions more difficult, particularly for larger commercial developments where early professional fees can be significant.

The consultation will consider whether the rules could be simplified while maintaining fairness across the tax system.

What does this mean for businesses?

There is no immediate change. Existing tax rules continue to apply until any future legislation is introduced.

However, developers, landlords and businesses considering new premises should continue to keep detailed records of every cost incurred during the planning stage. Good record keeping makes it much easier to determine the correct tax treatment and support any future claims.

Where projects span several years, accurate documentation becomes even more important.

Looking ahead

Although consultations do not always lead directly to new legislation, they often provide a clear indication of the Government’s thinking.

Businesses planning property developments should monitor future announcements and consider how any changes might affect the cost of future projects.

How we can help

Property taxation is rarely straightforward, particularly where development projects are involved. Our team can advise on the current tax treatment of development costs, help maintain appropriate records and ensure your project remains as tax efficient as possible as the rules continue to evolve.

If you are planning a development or significant property investment, please contact us before major expenditure begins. Early advice can often save both time and tax later

It is important to know if HMRC is holding money that belongs to you. For example, if you have paid too much tax to HMRC, you may be able to claim a tax refund (also known as a tax rebate). Overpayments can happen for a number of reasons, including changes in your employment, paying tax using the wrong startegy or not claiming eligible expenses.

The process for claiming a refund depends on your circumstances, including whether you complete a self-assessment tax return and the type of income or expense involved. HMRC provides an online service to help you find out what you need to do if you have overpaid tax.

You may be able to claim a refund if you have paid too much tax on income from a job, job-related expenses such as working from home, fuel, work clothing or tools, a pension, overpayments revealed by a  self-assessment tax return or a redundancy payment. Refunds may also be available for UK income taxed while living abroad, interest from savings or payment protection insurance (PPI), income from a life or pension annuity, foreign income, or UK income earned before leaving the UK.

HMRC offers an online service at www.gov.uk/claim-tax-refund/y that allows you to check whether you are eligible and, in many cases, submit a claim.

If you have already claimed a tax refund, you can use HMRC’s guidance to check when you should expect a response.

If you are selling shares or other investments, you may incur Capital Gains Tax (CGT) on any profit, or ‘gain’, you make. You will need to work out your gain to determine if you need to pay tax, which depends on whether your total gains exceed your CGT allowance for the tax year. 

You usually pay CGT on total gains above your annual tax-free allowance, which is currently £3,000. If your gains exceed the allowance, you must report and pay CGT. This is usually done through self-assessment, with different reporting deadlines depending on the type of asset disposed of. The rate of tax depends on your income. Basic rate taxpayers pay 18% CGT on gains within the basic rate band and 24% on amounts above it. Higher and additional rate taxpayers generally pay 24% CGT on all gains.

You do not usually pay CGT when you give shares as a gift to your husband, wife, civil partner, or a charity. Additionally, shares including those held within an ISA, those in employer Share Incentive Plans (SIPs) and UK government gilts are exempt. Your gain is typically the difference between what you paid for your shares and the sales proceeds. 

You can deduct costs like stockbrokers’ fees and Stamp Duty Reserve Tax (SDRT) from your gain. Various tax reliefs may also reduce or delay your CGT liability, including Business Asset Disposal Relief, Gift Hold-Over Relief, Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), and Rollover relief. Special rules apply for working out the cost of shares bought at different times in the same company, or if sold through an investment club.

It is important to calculate your gain, consider any applicable reliefs, and report to HMRC if your total gains exceed the annual allowance.

Most people are aware that cash donations to a charity can qualify for tax relief. However, it is less well known that gifts of land, property and qualifying shares can also provide valuable tax advantages.

If you donate land, property or shares to a UK charity, or sell them to a charity for less than their market value, you may be entitled to both Income Tax and Capital Gains Tax (CGT) relief. However, Income Tax relief is not available for gifts to Community Amateur Sports Clubs (CASCs).

Income Tax relief is claimed by deducting the value of the qualifying donation from your total taxable income for the tax year in which the gift or sale is made. If you complete a self-assessment tax return, the claim is made in the ‘Charitable giving’ section. Those who do not file a tax return can contact HMRC directly to claim the relief, either as a repayment or through an adjustment to their tax code.

There is also no CGT to pay on qualifying gifts of land, property or shares made to charity. Where an asset is sold to a charity for less than its market value, any gain is calculated using the actual amount paid by the charity rather than the asset’s market value.

To support any claim, it is important to retain records showing that the gift or sale was made and accepted by the charity. If the charity asks you to sell the asset on its behalf before donating the proceeds, keep evidence of both the gift and the charity’s request, as this will help preserve your entitlement to tax relief and avoid any unnecessary tax liability.