The Government estimates that new obligations placed on employers under the Employment Rights Bill could result in substantial compliance costs – totalling around £5 billion.

The Bill will introduce a ban on many zero-hour contracts and extend day one employment rights across several areas, such as protection from unfair dismissal and parental leave.

For employers, this will represent a significant shift in their current practices. Sectors such as hospitality, care and retail will be disproportionately affected due to the widespread use of zero-hour contracts to manage fluctuating demand.

Breaking down the costs

Compliance costs are likely to be the biggest hit faced by businesses and their cash reserves.

These may include:

• Training on new legislation
• Administration
• Loss of flexibility afforded by zero-hours contracts
• The costs associated with leave, such as temporary recruitment

For example, it is estimated that enhanced sick pay alone could cost employers around £400 million per year, while workforce planning could represent a cost of around £200 million.

Staying ahead of the curve

To offset potential expenses, you might want to prioritise:

• Efficiency – New processes, while potentially costly, are an opportunity to make work more efficient and reduce the overall time and cost associated with employment admin.
• Delaying investment – Many costs associated with compliance will taper off over time, so businesses may need to delay investment to maintain a healthy cash flow.
• Planning the transition – Starting early and covering staffing requirements without paying for unneeded hours can help to keep costs to a minimum.

While certain expenses are inevitable, careful spending and budgeting can help you reduce the pressure on your cash reserves.

For advice on managing the cost of the new employment rights, please contact our team today.

In this year’s Autumn Budget, Chancellor Rachel Reeves announced that the majority of unspent pension funds will form part of an estate from April 2027

This move is expected to affect around eight per cent of estates each year.

In practice, this means when an individual dies, they will still be able to pass on their assets, but the remainder of their pension pot will be added to property and shares as part of a potentially chargeable estate.

For an individual affected by this change, this could mean that an unspent pension fund of £800,000 could be taxed at 40 per cent (depending on their circumstances and use of other allowances and reliefs) leading to an IHT bill on their pension alone of £320,000.

A significant cost for their beneficiaries if they were to pass away after 6 April 2027.

The good news is that if you plan to leave your pension to your spouse or civil partner, this inheritance will remain tax-free, but it will then be included in their estate when they pass away meaning other beneficiaries may still be affected.

However, if you do not have this option or prefer a different strategy, it may be wise to re-evaluate your retirement and estate plans in light of these changes.

Potential strategies to consider

To mitigate the IHT impact, you could:

• Consider using pension funds sooner for personal spending.
• Withdraw and gift a portion of your pension to loved ones at least seven years ahead of your passing.
• Explore alternative estate planning that may better suit your goals and avoid unnecessary tax liabilities.

If you are planning to gift from your pension, be cautious not to leave yourself short of funds for a comfortable retirement.

Taxpayers should also maintain their existing pension plans, and contributions to private and employer pension schemes still remain a tax-efficient means of reducing your Income Tax bill.

Who will be affected the most?

While this change predominantly affects wealthier individuals, many families may now find themselves liable for IHT.

Thousands more estates will exceed the current £325,000 threshold (£500,000 if you utilise the Residence Nil-Rate Band), adding financial strain to an already challenging time of grief.

Even where these allowances are passed to a spouse to offer up to £1 million of relief, many estates may find themselves subject to IHT as a result of this change.

Please be aware that within the Budget documents, it was also confirmed that the nil-rate bands would remain frozen beyond 2028 until 2030, which means extra care needs to be taken.

With the latest announcement, we advise you to revisit your retirement plan with your accountant to assess any necessary adjustments before 2027.

Early planning will help ensure you are prepared well in advance and minimise any unintended tax burdens.

If you are concerned about how this change may affect your estate, please contact our team for advice tailored to your unique situation.

Recent research by Three Business indicates that tech-enabled SMEs could add an impressive £79 billion to the UK economy over the next year.

Technology is clearly a key driver and enabler of growth for businesses.

Despite this, their research also revealed a notable 42 per cent of SMEs worry that the complexities of adopting new technologies could hold back their growth. A further 55 per cent express concerns about the costs involved.

The benefits of using technology

There are endless advantages to investing in technology, not least the time it frees up to focus on more strategic initiatives by automating repetitive tasks.

Additional benefits include:

• Enhanced productivity and employee morale.
• Improved customer service using customer relationship management (CRM) systems to help personalise interactions.
• Advanced analytics and data management tools that provide valuable insights into your business operations and market trends.
• Smoother growth experience as tech solutions are designed to adapt to your growing needs without significant changes to your infrastructure.
• Cost reductions in the long run, for instance, cloud computing can lower infrastructure costs, while automation can reduce labour expenses.

Therefore, by effectively leveraging technology, you position yourself as a leader in innovation within your industry.

However, if you fail to utilise the tools at your disposal, you risk falling behind your competitors.

The good news is that there is a growing recognition of the need to invest in technology.

The Government’s recent Industrial Strategy highlights the importance of supporting businesses that can stimulate growth in the tech sector, as well as encouraging the adoption of technologies that enhance productivity.

Using tax reliefs to invest in technology

Investing in new technology does not have to put you in a vulnerable financial situation, as there are various Corporation Tax incentives available for businesses, including:

• Enhanced Capital Allowances (ECAs)
• Research and Development (R&D) tax credits
• Full Expensing
• Other Capital Allowances.

With ECAs, you can claim back 100 per cent of the investment in environmentally friendly technologies on your tax return.

If your business undertakes eligible R&D activities, you could receive a tax credit for your qualifying expenditure – check with your accountant to see if you are eligible.

All these allowances can further offset your taxable profits, reducing your Corporation Tax liabilities and leaving you with more cash to reinvest in your business.

Our expert accountants can help you identify the right technology to support your business goals, including cloud accounting tools that can streamline your financial processes, enhance collaboration, and provide real-time insights into your financial performance.

To make the best use of the tax reliefs related to the investment in technology and innovation, please get in touch.

As we approach the end of the year, one trend has become increasingly concerning for UK businesses – debts are on the rise.

According to a recent report, small to medium-sized enterprises (SMEs) have seen the value of bad debt surge by 127 per cent over the past six months.

This figure is alarmingly high, raising important questions about what is driving this increase and how you can take proactive steps to mitigate its impact.

Bad debts refer to money owed to a business that is deemed uncollectible, often resulting from customers’ inability or unwillingness to pay, which can negatively impact cash flow and profitability.

While many businesses and individuals have seemingly moved on from the pandemic, the economy is still suffering from its lasting effects.

Some SMEs are still struggling to recover, facing cash flow issues and fluctuating demand, all of which have been exacerbated by political instability and uncertainties surrounding the recent Budget.

Additionally, with the cost of living still so high, many individuals and companies are prioritising their essential expenses, leaving bills and invoices further down the list.

This situation poses significant challenges for SMEs, which typically do not have the same financial buffers as larger corporations.

Solutions to crack down on bad debts

If your business is facing bad debts and you are neglecting them, you are exposing yourself to cashflow issues, a poor credit rating and possible bankruptcy or liquidation.

To avoid such outcomes, there are a number of solutions you can utilise, including:

• Strengthening your credit policies – Regularly review credit policies to align with current market conditions. Conduct thorough credit checks on new clients and periodically reassess credit limits for existing ones.
• Setting clear payment expectations – Establish upfront payment terms to ensure clarity around due dates and any late fees. This proactive approach helps reduce misunderstandings and payment delays.
• Optimising invoicing processes – Adopt digital invoicing tools for efficient billing, ensuring prompt invoicing and automated reminders to improve timely payments.
• Fostering client relationships – Strong client relationships help manage payment issues. If a client faces financial difficulty, open discussions about payment plans can lead to better outcomes than escalation.

For businesses facing bad debt challenges, we strongly suggest you discuss the issue with an experienced accountant who can provide strategic solutions to you and your team.

With bad debts on the rise, you cannot afford to take a reactive approach – it is time to crack down.

For expert assistance and customised solutions for handling debt, contact our accounting team today.

In Chancellor Rachel Reeves’ 2024 Autumn Budget, she announced over £40 billion of tax increases, as the Government attempts to fill a £22 billion gap in public finances.

The headline measure was a rise in employer National Insurance Contributions (NICs), from 13.8 per cent (where applicable) to 15 per cent.

The Chancellor also reduced the threshold at which employers need to start paying NICs, from £9,100 to £5,000 per year. Both changes will apply from 6 April 2025.

An increase in Employment Allowance to £10,500, and the removal of the £100,000 threshold, offers support to around 865,000 of the smallest businesses – but other employers may be facing a perfect storm of rising costs.

The cost of employment

Alongside the rise in NICs for employers, the Chancellor announced a rise in the National Living Wage (NLW) from April 2025 to £12.21, a 6.7 per cent increase from the current rate of £11.44.

This equates to pay worth an additional £1,400 per year for a full-time worker over the age of 21.

Coupled with the cost of increased NICs, businesses are set to see a significant increase in employment costs.

Sectors with a high proportion of casual and flexible workers, such as hospitality, retail and leisure, will be disproportionately affected.

For advice on managing your business costs and planning around Budget measures, please contact our team.