Brace yourselves – April 2025 is bringing yet another financial curveball for small businesses. The government's hiking Employer National Insurance Contributions (NICs) from 13.8% to 15%, and to make matters trickier, the threshold is dropping from £9,100 to £5,000. In plain English? More of your hard-earned cash will be heading straight to HMRC.

As a small business ourselves, we understand how frustrating these changes can be. But let’s not panic – let’s plan. Here’s how you can tackle this head-on and keep your business running smoothly.

Make Every Penny of Payroll Count

Staffing is one of the biggest expenses for small businesses, so it’s worth taking a closer look at how you can get the most out of your payroll without making knee-jerk cuts. Can shifts be tweaked to match busier and quieter periods more accurately? Are there any tasks that could be automated to free up staff for more valuable work? And if you’ve got a team of all-rounders, consider cross-training them so they can step into different roles when needed – giving you more flexibility and less reliance on additional hires.

Work Smarter, Not Harder

When expenses go up, looking at where you can make operations leaner without sacrificing quality is key. Investing in the right tech might feel like a cost upfront, but automating everyday admin, invoicing, or stock management can save you time, money, and a few headaches in the long run. Small things add up – do you really need that software subscription you never use? Are there supplier contracts that could be renegotiated for a better deal? Now’s the time to comb through your costs with a critical eye.

Pricing – Be Strategic, Not Scary

Price increases are never fun to roll out, and we’re not saying you should hike your rates overnight. But if costs are going up, it’s important to make sure your pricing reflects that – without scaring customers away. Small, gradual adjustments tend to be easier for customers to accept, and offering value-driven bundles or loyalty perks can help soften the blow. Most customers understand that businesses are facing rising costs, so as long as you’re upfront and sensible about it, they’ll appreciate the honesty.

Get HMRC Working for You

The government might be taking more in NICs, but there are still tax breaks and reliefs designed to give smaller businesses a helping hand. The Employment Allowance could knock up to £5,000 off your employer NIC bill, and if you’re investing in new equipment, you might be able to claim some of it back under capital allowances. If you employ apprentices, there’s funding available to help with their training costs. These little wins can add up – so make sure you’re not leaving money on the table.

Find New Ways to Bring in Cash

A bump in running costs is a great excuse to think about new revenue streams. If you’ve been toying with the idea of adding an extra service, launching an online store, or even renting out space when you’re closed, now could be the time to test the waters. Diversifying doesn’t mean a complete business overhaul – it just means making the most of what you already have.

Let’s Talk

The reality is, small businesses often bear the brunt of these changes more than bigger firms, and it’s okay to feel frustrated. But with some smart planning and a few tweaks, you can get through this without losing sleep. If you’d like a second pair of eyes on your numbers, we’re here to help. Book a call with us or give our team a ring on 01709 589 439 and let’s chat about how we can keep your business in good shape for 2025 and beyond.