Archive for the ‘Uncategorized’ Category

Inheritance Tax proposals spark concern for farming families

Thursday, July 10th, 2025

Proposed changes to Inheritance Tax (IHT) are causing alarm in the UK farming community. If introduced as expected from April 2026, new rules could see agricultural estates over £1 million subject to 20% IHT, even when the land or business is still being farmed by the next generation.

This potential shift in the tax regime has triggered protests and demonstrations across the UK countryside. Farming families are worried that, without the current reliefs in place, it will become much harder to pass on farms without either selling off land or taking on significant debt.

Under the current rules, Agricultural Property Relief (APR) and Business Property Relief (BPR) can reduce the taxable value of a farming estate by up to 100%. This allows family farms to be passed down with minimal or no IHT liability, provided certain conditions are met.

The proposed changes would likely involve the reduction or removal of these reliefs for some types of land or property, particularly where the farm includes diversified business activity, such as holiday lets or renewable energy generation. There is also speculation that unused land, or land leased out under long-term arrangements, may no longer qualify.

For farmers and rural business owners, the implications are significant:

  • Land valuations are high, especially in the South and East of England. Even small farms can exceed £1 million in value, making them vulnerable to the new rules.
  • Succession planning becomes harder. With a 20% tax charge on top of probate and legal costs, the younger generation may find it financially unviable to continue the family business.
  • Borrowing to pay tax could increase pressure on margins, particularly in years with poor yields or falling commodity prices.

So, what can be done?

The key is to start planning early. Succession should be reviewed well before April 2026. This might include:

  • Restructuring the ownership of the land or business
  • Reviewing whether assets currently qualify for relief
  • Transferring ownership gradually during lifetime
  • Making use of trusts or lifetime gifting strategies where appropriate

Every farm is different, and tax planning in the agricultural sector requires a bespoke approach. The important thing is not to assume that the current rules will remain in place. The political and fiscal climate is shifting, and reliefs that have long been taken for granted may no longer apply.

If you are involved in farming, rural business, or own land used for agriculture, we strongly recommend a conversation about your current IHT position. Early advice can prevent future problems and help protect the legacy you plan to pass on.

Slowing growth and rising borrowing -what this means for your business

Tuesday, July 8th, 2025

The UK economy is showing signs of fatigue. Figures released at the end of June confirm that economic growth slowed to 0.7% in the first quarter of 2025. For small business owners, this is more than just a headline as it signals a shift in consumer behaviour, business confidence, and access to finance.

The Office for National Statistics (ONS) reports that household real incomes are falling. Disposable income is down by 1%, and personal saving rates are at their lowest since 2020. In plain terms, consumers have less money in their pockets. For businesses in retail, hospitality, or services, this may already be translating into weaker sales and a rise in price sensitivity.

At the same time, public borrowing is creeping up. Government figures show a rise in borrowing in the early months of the 2025-26 tax year, adding to fiscal pressure on the new government. With several welfare policy U-turns removing planned savings, the Chancellor faces a difficult Autumn Budget. Tax rises, cuts to investment allowances, or delays to business incentives are all possible outcomes.

The result is a more cautious economic mood. Many small business owners are already reporting tighter trading conditions and lengthening payment cycles. For those relying on external finance, the outlook is becoming more complex. Interest rates have remained relatively high, and lenders are applying stricter affordability tests – especially in sectors deemed higher risk.

What should business owners be doing now?

  1. Revisit your cashflow forecasts – Account for lower revenue assumptions, changes in repayment terms, and higher finance costs. If possible, build in contingency funds for slower months.
  2. Review your cost base  – Rising National Insurance contributions and minimum wage increases from April 2025 may already be having an impact. Consider whether savings can be made without affecting quality or customer service.
  3. Prepare early for borrowing – If you are planning to seek finance or refinance existing lending, start the process sooner. Banks and alternative lenders will want to see up-to-date management accounts and evidence of strong financial control.
  4. Talk to us – If you are concerned about profit margins, tax bills, or capital expenditure plans, now is the time to reassess. Small changes in tax planning or investment timing can make a difference.

Although growth is expected to return later in the year, the second half of 2025 is likely to be bumpy. In uncertain times, the businesses that perform best are usually those that plan ahead, communicate clearly, and keep a close eye on the numbers.

Are you ready for Companies House ID checks?

Monday, July 7th, 2025

From 2025, Companies House is rolling out new identity verification requirements for directors, people with significant control (PSCs), and anyone forming or managing a UK company. These changes form part of the Economic Crime and Corporate Transparency Act and are designed to reduce fraud and increase confidence in UK companies.

If you are involved in running a business, you may soon need to prove your identity either directly through Companies House or via a registered agent such as your accountant. Without completing verification, you will not be allowed to register a company or take up a new role as a director or PSC.

These rules apply to:

  • Company directors (existing and new)
  • Individuals with significant control (usually shareholders with 25% or more of shares or voting rights)
  • Company formation agents
  • Anyone filing information at Companies House on behalf of a business

The new system is already partially in place. Since April 2025, authorised agents can verify identities on behalf of their clients, but from a future date still to be announced, Companies House will require all key company officers to comply before filings will be accepted.

For business owners, this means a few practical actions:

  • Ensure all directors and PSCs have current and valid photo ID.
  • Decide whether you want to complete ID checks directly or use an authorised agent.
  • Check that your company’s records at Companies House are up to date.

We expect enforcement and deadlines to follow later in the year, so it is wise to prepare in advance. If you are uncertain how these changes affect you, or how best to carry out the verification, we are happy to help.

What would a closure of the Strait of Hormuz mean for the UK

Thursday, July 3rd, 2025

Tensions in the Middle East have always carried global implications, but few pressure points are more critical than the Strait of Hormuz. This narrow passage off the coast of Iran is the transit route for around one-fifth of the world’s oil and a quarter of its liquefied natural gas (LNG). A closure, even temporary, would trigger a global economic ripple. For the UK, the consequences would be serious, with sharp effects on energy costs, inflation, and supply chains.

The likely impact on the UK economy

Although the UK does not buy a large share of oil or gas directly from the Gulf, global energy markets are extremely sensitive. A disruption in supply from the region would cause oil and gas prices to surge on international markets. That would feed through to UK fuel prices, electricity generation costs, and ultimately to the cost of goods and services.

Households would feel the pinch at the petrol pump and through higher heating bills. Businesses would face increased production and transport costs. Sectors such as food, manufacturing, and logistics, all of which rely on energy-intensive processes or imported inputs, could see margins squeezed or operations disrupted.

With inflation already proving stubborn, a sudden energy price shock could reverse recent progress and prompt the Bank of England to hold or even increase interest rates. That would add to borrowing costs, slow consumer spending, and potentially delay investment decisions by UK firms.

How UK businesses can respond now

While the exact course of events cannot be predicted, businesses can take practical steps now to reduce their exposure to external shocks like this one.

  1. Review and diversify supply chains
    Look for alternatives to suppliers or routes that may be affected by increased shipping costs or delays. Building in more resilience can help ensure continuity.
  2. Lock in energy contracts
    Businesses should explore fixed-price energy contracts or forward purchasing arrangements where possible. This can cap exposure to sudden cost spikes.
  3. Build working capital reserves
    Improving cash flow and keeping a buffer in reserve will help businesses weather a temporary period of higher costs or slower trading.
  4. Increase pricing flexibility
    Firms should assess where modest price rises might be accepted by customers if energy-related costs go up and have plans ready.
  5. Monitor geopolitical and market signals
    Keeping informed of developments in the region and commodity markets allows for quicker reactions and better-informed decisions.

Conclusion

The UK may not be on the frontline of Middle Eastern tensions, but it is firmly within the economic blast radius of any disruption to global energy flows. With risks like a Strait of Hormuz closure hard to predict but potentially severe, sensible preparation is not alarmist, it is strategic. Businesses that plan ahead are more likely to stay resilient, competitive, and in control, whatever the headlines bring.

Why every business owner needs an exit plan

Tuesday, July 1st, 2025

For many business owners, the daily focus is on growth, sales, staff, and operations. Planning an exit often sits far down the priority list, something to deal with “one day.” However, failing to plan for how and when you will eventually leave your business can result in missed opportunities, lost value, and unnecessary stress. Whether you plan to sell, pass the business to family, or simply wind it down, an exit plan is essential.

Protecting and realising value

Your business is likely one of your most valuable assets. Without a clear exit strategy, it can be difficult to extract its full value when the time comes to leave. A good plan will help you tidy up financial records, secure long-term contracts, strengthen leadership, and ensure systems are in place that make the business more attractive to buyers or successors.

Exit planning can also highlight areas where value is currently locked in, for example, if too much of the business depends on you personally. By addressing these issues early, you make the business more stable and reduce risk for future owners.

Avoiding disruption and stress

Unexpected life events such as illness, family changes, or economic shifts can quickly bring about the need to exit the business. If you are unprepared, this can lead to hurried decisions, disputes, or financial shortfalls. A well-considered plan helps you stay in control, even if circumstances change suddenly.

It also protects employees, customers, and suppliers. Knowing there is a continuity plan in place builds confidence and ensures that the business can continue running smoothly during a transition.

Tax and legal efficiency

Leaving a business has tax consequences, whether through Capital Gains Tax, Inheritance Tax, or income withdrawals. Exit planning gives time to structure the business in a tax-efficient way, perhaps by using Business Asset Disposal Relief, family trusts, or share restructures. Legal aspects such as shareholder agreements, wills, and powers of attorney should also be reviewed and aligned with your plans.

Without forward planning, you may face higher tax bills or delays in transferring ownership.

Clarity of purpose and timing

Even if you love what you do, there will come a time when you want to slow down or move on. Setting a clear goal and timeframe helps guide business decisions. For example, if you want to sell in five years, you might focus on building recurring income, diversifying your customer base, or reducing reliance on key individuals.

It also helps family members or co-owners understand your intentions. This avoids conflict later and allows others to plan their own roles accordingly.

Conclusion

Exit planning is not just about leaving, it is about shaping the future of your business and ensuring that the rewards of your hard work are protected. By starting early, you give yourself time to increase value, reduce risk, and leave on your own terms. A professional adviser can help you map out the right strategy and keep it under regular review. The best exits are planned, not improvised.

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