Cash flow is the backbone of any small business, yet late payments continue to be a major challenge for entrepreneurs across the UK. According to the Federation of Small Businesses (FSB), around 50,000 businesses close annually due to cash flow problems caused by overdue invoices. To help combat this issue, the UK government has set up the Small Business Commissioner (SBC) to support businesses in tackling late payment disputes and improving payment practices.

Why Late Payments Are a Problem

Late payments can cause severe disruptions to business operations, affecting your ability to pay employees, invest in growth, and maintain supplier relationships. Delays in receiving funds can lead to increased borrowing, higher interest payments, and unnecessary stress for business owners. Worse still, chasing unpaid invoices can be time-consuming and frustrating.

How the Small Business Commissioner Can Help

The SBC is an independent public body that provides free support and advice to small businesses dealing with late payment issues. Services include:

• Advisory Services – Guidance on how to prevent and manage late payments.
• Complaint Resolution – Assisting small businesses in resolving disputes with larger firms over unpaid invoices.
• Webinars and Educational Resources – Free workshops, webinars, and guidance on improving payment practices.

Practical Steps to Avoid Late Payments

To protect your business from cash flow disruptions caused by late payments, consider these strategies:

1. Set Clear Payment Terms – Ensure that all contracts specify payment deadlines, late payment penalties, and accepted payment methods.
2. Invoice Promptly – Send invoices as soon as work is completed, or goods are delivered and follow up promptly.
3. Use Digital Invoicing and Payment Tracking – Tools like QuickBooks, Xero, or Sage can automate reminders and track payments efficiently.
4. Charge Late Payment Interest – Under the Late Payment of Commercial Debts Act, businesses can charge interest on overdue payments.
5. Seek Mediation or Legal Action – If payment disputes escalate, consider mediation through the SBC or taking legal action.

By implementing proactive measures and utilising available support, small businesses can reduce the impact of late payments and maintain a stable financial position.

From 6 April 2025, new thresholds for student loan repayments will take effect, impacting borrowers across the UK. Whether you're on Plan 1, Plan 2, Plan 4, or repaying a postgraduate loan, here’s a breakdown of the latest changes and what they mean for you.

Student loans are a key component of the government’s financial assistance package for individuals pursuing higher education in the United Kingdom. These loans are designed to support students with their living and tuition expenses while studying. The responsibility for collecting repayments from borrowers in the UK lies with HM Revenue & Customs (HMRC). For those working outside the UK tax system, the Student Loans Company (SLC) is tasked with managing the repayment process.

Effective from 6 April 2025, the thresholds and repayment rates for various student loan plans will be as follows:

• Plan 1: £26,065
• Plan 2: £28,470
• Plan 4: £32,745

The loan repayment terms for students who commenced their courses before 1 September 2012 are categorised under 'Plan 1'. Those who began their studies after 1 September 2012 are subject to 'Plan 2' terms. Under these plans, repayments are set at a rate of 9% of income above the respective threshold.

Student loans taken out by borrowers in Scotland are classified as 'Plan 4' loans, with a repayment threshold of £32,745, and the repayment terms are similar to those of Plan 2 loans.

For postgraduate loans, the threshold remains unchanged at £21,000, with repayments deducted at a rate of 6% of income above this amount.

These loans are subject to varying interest rates, which are determined by the Retail Prices Index (RPI) and are also influenced by the borrower's income level. Specifically, the interest rate for Plan 2 repayments is variable, calculated as RPI plus an additional percentage that fluctuates according to income. The interest rates applied to Plan 1 repayments are usually significantly lower than those for Plan 2.

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.

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.

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.