The tax you pay on the use of a company car depends largely on its CO2 emissions, so choosing a lower emission or electric vehicle can make a significant difference to your overall tax cost.

The benefits in kind (BIK) tax on company cars can be quite significant, with taxable rates ranging from 3% to 37% of the car’s list price when new. The rate depends on various factors, primarily the car’s CO2 emissions and fuel type. For instance, a petrol fuelled car emitting 155 g/km of CO2 or more would be taxed at the highest rate of 37% of its original list price. In contrast, an electric car with a range of 130 miles or more could benefit from the lowest rate of just 3%, significantly reducing the taxable benefit.

This creates a strong incentive for those driving company cars to switch to electric vehicles, as they would experience a noticeable reduction in their tax liability. This shift not only benefits the employees but also employers, who will see a decrease in Class 1A National Insurance contributions. These contributions are based on the total value of benefits provided in a tax year, so switching to electric vehicles helps lower overall costs for the employer.

Diesel cars attract an additional 4% supplement if they do not meet the Real Driving Emissions 2 (RDE2) standard. However, the supplement is removed entirely for diesel vehicles that are RDE2 compliant. The maximum BIK rate, including any diesel supplement, remains capped at 37%.

The taxable benefit is typically calculated based on the car’s manufacturer’s list price, which includes VAT, delivery charges, and number plates. The price considered is the list price on the day before the car is first registered. Any additional accessories fitted to the car also increase the taxable value. There are some exceptions. Employees can also reduce the list price by up to £5,000 if they make a capital contribution towards the cost of the vehicle. Special rules apply to classic cars, which have their own method for calculating the list price.

If your business has relatively low VATable expenses, the VAT Flat Rate Scheme can simplify your VAT reporting and may also improve cash flow.

The VAT Flat Rate Scheme is designed to simplify VAT accounting for small businesses. Instead of calculating VAT on each sale and purchase, businesses pay a fixed percentage of their total turnover, including VAT. This percentage varies depending on the type of business activity and is set by HMRC.

The scheme reduces the complexity of VAT compliance by eliminating the need for detailed calculations and record-keeping of input VAT on purchases.

To be eligible for the scheme, a business must expect its annual taxable turnover (excluding VAT) to be no more than £150,000 in the next 12 months.

The advantages of the VAT Flat Rate Scheme include:

• Simplified VAT Administration. Businesses don't need to calculate VAT on each sale or claim VAT on most purchases, reducing time and effort involved in VAT reporting.
• Predictability of VAT Payments. The fixed flat rate percentage makes it easier to predict and budget for VAT payments, improving cash flow management.
• Potential Financial Savings. If your business has minimal expenses that are subject to VAT, you may pay less VAT overall compared to the standard VAT method.
• Ideal for Service-Based Businesses. Businesses with minimal goods purchases, such as consultants, IT professionals and freelancers, often benefit the most. This is especially true if they are not classified as limited cost traders.
• 1% First-Year Discount. This temporary discount provides a cash flow boost, which can be especially useful for new or growing businesses. It only applies in the first year of VAT registration.

While the scheme can greatly simplify VAT reporting and reduce administrative burdens, businesses should regularly assess its suitability, as it may not always remain advantageous as a company expands or its circumstances change.

If you file a Self-Assessment return you may need to pay your tax in three instalments, so it is useful to know when payments on account apply and when they can be reduced or removed.

The first two payments on account are due by 31 January during the tax year and by the 31 July after the tax year has ended. Each payment on account is based on 50% of the previous year’s net Income Tax liability. Additionally, the third (or balancing) payment is due on 31 January after the tax year ends.

However, there are certain situations where you do not need to make payments on account such as:

1. Your last tax bill is under £1,000. If your self-assessment tax bill for the previous year is less than £1,000, you will not be required to make payments on account.
2. You have already paid the tax through other means. If at least 80% of the tax due has already been collected through other means, such as PAYE, then payments on account are not required. This might apply if you are employed and have sufficient tax deductions taken from your salary.
3. You have a low or no income in the current tax year. If you expect your income to be much lower in the current year, you can apply to reduce or cancel your payments on account. This can be done through HMRC’s online service or by submitting form SA303.

There is no limit on the number of times you can apply to adjust your payments on account. If your liability for 2024-25 is lower than for 2023-24, you can request HMRC to reduce your payments. The deadline to submit a claim to reduce your payments on account for 2024-25 is 31 January 2026.

If your taxable profits have increased, there is no obligation to inform HMRC, but your final balancing payment will obviously be higher.

Change is part of every business journey. Whether it is prompted by new technology, regulation or shifts in the market, the ability to adapt determines how well a business performs in the long term. Yet managing change is not simply about introducing something new. It is about understanding what needs to change, why it matters and how to make the transition smoothly while keeping your team and clients on side.

The most successful businesses approach change as a structured process. It begins with recognising the need for change. This might come from declining profits, new reporting requirements, or a drive for greater efficiency. Once the need is clear, the next step is to define what the future should look like and what success will mean in measurable terms. For instance, a firm may aim to automate routine tasks, improve cash flow management or expand into new markets.

Good planning follows. This includes identifying resources, setting timelines, assigning responsibilities and communicating openly with everyone involved. People need to understand what is happening, when it will happen and what it means for them. Regular updates, clear information and honest answers help to reduce anxiety and build commitment.

Implementation is where plans become action. Training, testing and feedback are all essential at this stage. It is important to remain flexible and to make adjustments as issues arise. Small, visible wins also help to maintain motivation and demonstrate that progress is being made.

Once changes are in place, they need to be sustained. This means updating policies, embedding new processes into everyday work and making sure that improvements are monitored. Without ongoing attention, even successful changes can fade away over time.

Every change, whether large or small, brings both challenges and opportunities. The process can seem daunting, but a clear plan and the right guidance make a real difference. The aim is to move forward with confidence, maintaining control and ensuring that the change strengthens the business rather than disrupts it.

If you are facing a change process, whatever that might be, then pick up the phone. We can help you plan and meet your challenges.

For any business, knowing how to value and price what it sells is fundamental to success. Yet many small firms still rely on guesswork or simply copy competitors’ prices without understanding whether their own costs, quality or value proposition justify those figures. Accountants can play an important role in helping clients to take a structured approach to pricing and valuation, ensuring that products and services deliver both profit and sustainability.

Understand the true cost base
The starting point for any pricing decision is to establish the real cost of production or service delivery. This includes not only direct costs such as materials, wages and subcontractors, but also a fair allocation of overheads such as rent, utilities, marketing and administration. Once a business has a full understanding of its cost base, it can identify the minimum viable price required to cover costs and earn a profit margin. Accountants can assist by reviewing costing methods and ensuring that indirect costs are not overlooked.

Add value, do not just add margin
Too many businesses apply a simple markup to costs and call it pricing. A more strategic approach looks at the perceived value from the customer’s perspective. What problems does the product or service solve, how is it different and what benefits does it offer compared with competitors? Value-based pricing allows firms to charge more when the customer sees a clear benefit or saving. For example, if a service saves a client several hours each week, the price can reflect part of that time saving as additional value.

Use segmentation and flexibility
Not all customers are the same and pricing does not have to be either. Offering packages or tiers can help serve different market segments without undercutting core pricing. For example, a “standard,” “premium,” and “enterprise” level can target different budgets and expectations. Seasonal discounts, early payment incentives, or loyalty pricing can also be effective if managed carefully. The key is consistency and transparency.

Monitor performance and adjust regularly
Pricing is not a one-off exercise. Markets, costs and demand all change. Businesses should regularly review their margins, conversion rates and customer feedback to assess whether their pricing remains competitive and profitable. Accountants can add value by providing performance reports and benchmarking against industry standards.

If you would like help reviewing your pricing structure or working out how to value what you sell, please get in touch. We can help you analyse your costs, benchmark performance and design a pricing model that supports long-term profitability.