Most business owners know that progress matters, but many still hesitate when it comes to planning. It can feel like an extra task or something that only large companies need to worry about. Yet, in practice, steady planning is one of the simplest ways to create real progress in any small or medium sized business. The link between the two is stronger than many people realise.

Planning works because it forces clarity. When business owners pause to think through priorities, patterns and pressures, they begin to see what is really driving results. Cash flow issues, capacity limits and pricing decisions all come into focus. This clarity helps owners make better choices, because they can see which actions will genuinely move the business forward and which are distractions. Without planning, decisions are often reactive and progress becomes slow or inconsistent.

Regular planning also builds momentum. A short monthly review of sales, costs, workload and upcoming commitments can help owners stay ahead of issues. They spot pressure points sooner and have time to adjust. Small, steady actions taken throughout the year often make far more difference than a single big push at year end. The cumulative effect is smoother trading, fewer surprises and a clearer path towards goals.

Another benefit is accountability. When owners write down their intentions, it becomes easier to measure progress. Plans do not have to be complex. A simple list of priorities, actions and expected outcomes is enough to bring structure. Even this light level of discipline strengthens focus and encourages follow through. Over time, owners start to recognise how much difference these small habits make.

Many business owners focus on sales as the main driver of growth. Sales matter, but they are only part of the story. Real financial growth happens when a business retains profits. Keeping a portion of earnings inside the business, rather than extracting everything each year, creates stability, resilience and long term value. It is one of the most reliable ways for a business to strengthen its financial position.

Retained profit is simply the surplus left after all costs, tax and drawings or dividends have been paid. When owners choose to leave some of this in the business, the financial base becomes stronger. Cash balances increase, working capital improves and the business has more freedom to act. This is important because many opportunities appear only when a business is ready to respond. A new contract, a piece of equipment, or an unexpected staff change often needs quick decisions. Financial strength gives owners room to choose rather than react.

Another advantage is the reduction of financial strain. When profits are taken out in full, the business can become fragile. Seasonal changes, delayed payments, or rising costs can suddenly create pressure. Retaining profits reduces this risk. It smooths the ups and downs of trading and reduces reliance on overdrafts or short term borrowing. Over time, this lowers costs because the business is not constantly paying interest or reshaping its finances to manage cash shortages.

Retained profits also support growth by funding future investment. Whether it is new technology, better equipment, improved systems, or additional staff, every investment needs capital. Using retained profits means the business can invest without taking on unnecessary debt. This keeps control in the hands of the owners and protects future cash flow. In many cases, even small retained amounts, built up steadily, can support meaningful improvements.

There is also a psychological effect. When owners see their business building reserves, confidence grows. Decisions become more strategic and less driven by short term pressures. This confidence often leads to better long term planning, more thoughtful hiring and a clearer focus on profitability rather than turnover alone.

Finally, strong retained profits increase the value of the business. Buyers look for organisations with reliable earnings, low debt and healthy reserves. A pattern of retaining profits signals discipline and financial strength, which can significantly improve valuation.

Retaining profits is not about restricting personal income. It is about giving the business the capacity to grow, adapt and remain competitive. When owners take a long term view, retaining profits becomes one of the simplest and most effective tools for building financial strength.

Making Tax Digital for Income Tax (MTD for IT) will become mandatory in phases from April 2026. If you are self-employed or a landlord and have over £50,000 in qualifying income you need to start preparing to submit quarterly updates, keeping digital records and cope with a new penalty system.

Your qualifying income is the total income you receive in a tax year from self-employment and property. Other income, such as from employment (PAYE), partnerships or dividends (including from your own company), do not count towards your qualifying income.

HMRC will calculate your qualifying income based on your self-assessment tax return you submitted in the previous year. For example, to assess your income for the 2026-2027 tax year, they will use the return you submit for the 2024-2025 tax year which is due to be submitted by 31 January 2026. If your qualifying income is over £50,000, HMRC will inform you when you need to start using MTD for IT.

Qualifying income includes your share of income from jointly owned property, certain trusts, VAT-registered businesses and disguised investment management fees. It does not include business partnership income, transition profits or qualifying care relief payments.

Initially, MTD for IT will only apply to self-employed individuals, and landlords with an annual qualifying income exceeding £50,000. From 6 April 2027, the rules will extend to those with a qualifying income between £30,000 and £50,000. From April 2028, sole traders and landlords with qualifying income over £20,000 will need to follow MTD rules. The government is also exploring ways to bring those earning under £20,000 within the MTD framework at a future date.

If you earn fees or sell goods as a side hustle, you may need to pay tax on your profits.

HMRC has launched a new press release encouraging Christmas crafters and anyone with a fee earning hobby to check their tax reporting obligations as part of its Help for Hustles campaign. This is relevant to individuals earning extra income, whether from crafting Christmas decorations, selling festive items at market stalls, or upcycling furniture for seasonal sales. Those earning more than £1,000 in total from these activities may need to report their earnings to HMRC.

To help these side hustlers navigate their tax obligations, HMRC has introduced an online checker tool that helps individuals determine whether or not they need to declare additional income.

There are two £1,000 tax allowances available for small amounts of miscellaneous income: one for trading income and one for property income. Taxpayers who have both types of income can claim £1,000 for each.

• Trading Allowance: If a taxpayer makes up to £1,000 from self-employment (e.g., craft sales or content creation), this income is tax-free and doesn’t need to be declared. However, the £1,000 threshold applies to all combined trading activities. For example, if someone earns £600 from craft sales and £500 from content creation, their total trading income exceeds £1,000 and must be reported to HMRC.
• Property Allowance: If a taxpayer earns £1,000 or less from property-related activities (e.g., renting out a driveway), they don’t need to report this income to HMRC or include it in their tax return.

These allowances cover all relevant income before expenses. If a taxpayer's income is under £1,000, it’s tax-free. If they earn more than £1,000, they can either deduct the £1,000 allowance from their income or list their actual expenses when calculating taxable profit.

However, if side hustle income exceeds £1,000 in a tax year, taxpayers may need to complete a Self-Assessment tax return. This also includes income from cryptoassets. Importantly, this requirement applies only to active trading or selling services. If someone is just clearing out old items, there is usually no need to worry about tax.

For the 2024-25 tax year, the deadline to submit a tax return online and pay any tax owed is 31 January 2026.

A demerger involves splitting the trading activities of a single company or group into two or more independent entities. This can be facilitated by distributing the assets of a holding company to its shareholders.

There are special statutory demerger provisions that are designed to make it easier to divide and put into separate corporate ownership the trading activities of a company or group of companies. An exempt demerger will be deemed to occur under these provisions. As a result, the distribution is typically exempt from Income Tax and usually does not trigger any Capital Gains Tax, as the gains are effectively rolled over.

The provisions do not apply where a trading activity is to be sold or becomes owned by a person other than the existing member of the original company.

The provisions allow for the removal of the distribution charge in appropriate circumstances, making the distribution an ‘exempt distribution’. This applies to trading activities only. Companies that utilise the demerger provisions range from small private businesses to some of the largest public companies in the UK.

The legislation also provides for a clearance procedure. Under this a company that wants to demerge trading activities can obtain advance confirmation from HMRC that the distribution that will arise will be an exempt distribution.