How UK small businesses are adapting for the new tax year

The advent of the new tax year in the UK has spurred a flurry of strategic planning among small businesses. Despite economic uncertainties, a substantial majority of businesses are seizing the opportunity presented by the new tax year to reposition themselves for success

CREDIT: This is an edited version of an article that originally appeared on SME News 

A recent study by Intuit QuickBooks has revealed how UK small businesses plan to tackle the new tax year, which commenced this month. The study indicates that nearly all surveyed small businesses are intending to implement drastic alterations in their business operations for the new tax year.

Among the surveyed businesses, nearly half are planning to upgrade their financial management systems, while a significant portion intends to seek guidance from financial advisors and consultants. Additionally, over half of the organizations expressed intentions to incorporate AI solutions to streamline tax processes. Furthermore, 50% are dedicated to exploring strategies for tax minimisation while maintaining compliance with legal standards.

Despite a considerable portion of surveyed small businesses expressing concerns about the economy impacting their operations negatively, 68% acknowledge the new tax year as an opportune moment to contemplate potential adjustments for positioning themselves for success.

When analysing the factors contributing to small business pessimism, the primary factor, identified by 34%, is financial or economic uncertainty. Consequently, a substantial majority, comprising 79%, are contemplating deferring their investment plans until after the general election.

Additional findings from the survey unveiled that 63% of SMEs perceive the new tax year as a critical juncture that could determine the fate of their business. Moreover, a significant majority of small businesses, comprising 84%, intend to implement cost-cutting measures in the upcoming tax year. Specifically, more than two in five (44%) plan to trim overhead expenses, while over a third (37%) anticipate implementing hiring freezes.

Pauline Green, head of product compliance & programs at Intuit QuickBooks UK comments: “Being a busy small business owner often means taking on multiple roles in the business, and accounting isn’t always a top priority in the day to day, often meaning the paperwork gets pushed into the ‘for later’ pile. Adapting to economic instability this year has also been a challenge, but the new tax year presents a great opportunity for small business owners to start afresh, with solutions that might better meet their needs and do the accounting role for them, taking away the pain points and allowing them to remember why they started the business in the first place.”