Author: Glenn

Expanding into international markets can be a game-changer for UK small businesses, opening up new revenue streams and increasing business resilience. With the right knowledge and support, even small firms can successfully sell their products and services abroad. The UK government offers various resources to help businesses navigate the complexities of exporting.

Why Exporting Matters for Small Businesses

Exporting allows businesses to diversify their customer base, reduce dependency on the domestic market, and increase profitability. The UK has strong trade links with Europe, the United States, and emerging economies, providing numerous opportunities for businesses to grow.

However, international trade comes with challenges, including understanding customs regulations, dealing with fluctuating exchange rates, and adapting products to different markets. That’s where government support comes in.

Government Support for Exporting

The Department for Business and Trade (DBT) provides extensive resources to help small businesses start or expand their export operations, including:

• Export Academy – A free training programme designed to help businesses understand the basics of international trade.
• UK Export Finance (UKEF) – Provides financial support such as export insurance, loans, and guarantees to protect against non-payment risks.
• Market Research and Guidance – Access to information on demand for products in different countries, cultural considerations, and regulatory requirements.

Steps to Start Exporting

1. Identify Your Target Markets – Research countries where there is demand for your product or service.
2. Understand Customs and Compliance – Each country has its own regulations for imports, and businesses must comply with local laws.
3. Consider Logistics and Shipping – Work with freight forwarders or couriers who specialise in international shipping.
4. Adapt to Local Preferences – Modifying packaging, pricing, or marketing strategies to suit the target audience can enhance success.
5. Use Trade Shows and Networking – Attending international trade fairs can help you connect with potential buyers and distributors.

With the right support and careful planning, small businesses can leverage international markets to achieve long-term success.

From 6 April 2025, employers will face a 1.2% rise in National Insurance contributions, alongside a lower NICs threshold. However, an increased Employment Allowance aims to ease the burden for small businesses. Here’s what you need to prepare for these key changes.

The main rate of secondary Class 1 NICs will rise by 1.2%, from 13.8% to 15%. This increase will also apply to the employer rates for Class 1A and Class 1B NICs.

In addition, the Class 1 NICs secondary threshold—the point at which employers begin to pay NICs—will be lowered from £9,100 to £5,000 per year, effective from 6 April 2025. This reduced threshold will remain in place until 5 April 2028. After this period, the secondary Class 1 NICs threshold will be adjusted annually in line with the Consumer Price Index (CPI).

To help support small businesses in adapting to these changes, the Employment Allowance will increase from £5,000 to £10,500. The Employment Allowance allows eligible employers to reduce their NICs liability. Currently, this allowance is available only to employers with NIC liabilities of under £100,000.

The £100,000 threshold for the Employment Allowance will also be removed, allowing all eligible small businesses to benefit from the increased rate. According to government figures, this change means that approximately 865,000 employers will pay no NICs in the coming year. These changes take effect from April 2025. An employer can claim less than the maximum if this covers their total Class 1 NICs bill.

Your tax code determines how much tax is deducted from your pay. While 1257L is the most common, different letters and numbers can affect how much you owe. From marriage allowance to emergency codes, here’s how to decode what HMRC assigns you.

Your tax code is basically a set of letters and numbers that show whether you are entitled to the annual tax-free personal allowance (the amount you can earn without paying tax). These codes are updated each year and help your employer figure out how much tax to take off your pay.

For the current and next tax years, the standard personal allowance is £12,570, and if you are entitled to this, your tax code will likely be 1257L. This is the most common code and applies to people with one job, no untaxed income, and no taxable benefits like a company car.

But tax codes are not always that straightforward. There are all sorts of other letters and numbers that might pop up. For example, if you are claiming the marriage allowance, your code might have an "M" in it. If you are paying tax at the Scottish rates, your code will start with an "S." And if your personal allowance gets reduced for some reason, like unpaid tax or income adjustments, your code will change accordingly.

Then there are the emergency tax codes—W1 or M1—which are used when someone starts a new job and does not have a P45 yet. These codes mean your tax will be calculated based on just that specific pay period, rather than your full income.

If you spot a 'K' at the start of your tax code, it means deductions (for things like company benefits, state pension, or previous tax owed) are greater than your personal allowance. Your tax deduction won’t be more than half of your pay or pension.

If you are moving goods across borders, an EORI number may be essential for customs clearance. Whether trading with the EU, Northern Ireland, or beyond, knowing which type you need—GB, XI, or EU—can save time and hassle. Here’s what you need to know.

The EORI number is required for the following situations:

• Moving goods between Great Britain (England, Scotland, and Wales) or the Isle of Man and any other country, including EU member states.
• Moving goods between Great Britain and Northern Ireland.
• Moving goods between Great Britain and the Channel Islands.
• Moving goods between Northern Ireland and countries outside the EU.

The type of EORI number required and where to obtain it depends on the origin and destination of the goods. If you are moving goods to or from Great Britain, you need an EORI number that starts with GB, followed by a 12-digit number based on the business's VAT number.

For movements involving Northern Ireland, you need an EORI number that starts with XI. If you are making declarations or receiving customs decisions within the EU, you may need an EU EORI number from an EU country.

An EORI number is not necessary where both of the following apply:

• The goods being moved are not controlled.
• The goods are for personal use only.

Economic operators (EOs) that are not established in the UK (for a GB EORI) or in Northern Ireland (for an XI EORI) may still be able to register for an EORI number under certain conditions.

Understanding when and which type of EORI number is required is important in order to comply with necessary customs regulations when moving goods internationally.

Big changes are here for the self-employed! From 2024-25, profits must align with the tax year, replacing the old "current year basis." Overlap relief is ending, and transition profits will be spread over five years. Here’s how the new system affects your tax bill.

The reform to the self-employed tax basis period has introduced significant changes in how trading income is allocated to tax years. Previously, the tax basis period operated on a "current year basis," but the reform has now shifted to a "tax year basis." As a result, all sole traders and partnership businesses are required to report their profits based on the tax year, commencing with the self-assessment return that was due by 31 January 2025. This return covered the tax year 2023-24.

Under the previous system, overlapping basis periods could occur, which resulted in certain profits being taxed twice. To counter this, businesses could claim ‘overlap relief,’ typically at the time of business cessation. The introduction of the "tax year basis" eliminates the possibility of overlapping basis periods, thereby preventing the generation of further overlap relief.

It is important to note that businesses which already prepare annual accounts to a date between 31 March and 5 April are not affected by these changes. These businesses continue to file their tax returns as they did under the old system, without any alteration.

The full implementation of the new rules takes effect in the current 2024-25 tax year, which ends on 5 April 2025. The 2023-24 tax year is considered a "transition year." During this transitional period, the basis periods for all businesses will be aligned with the tax year, and any outstanding overlap relief can be utilised against profits for that period.

In cases where profits exceed the period covered by the overlap relief—specifically profits that span more than 12 months—these are referred to as "transition profit." This transition profit will, by default, be spread across five tax years, from 2023-24 to 2027-28, to help ensure a smooth adjustment to the new rules.