The financial landscape for UK small business owners has become more challenging in 2025, with tax increases adding to the strain. Rising corporation tax rates, ongoing compliance with HMRC regulations and mounting operational costs have left many small businesses questioning how to stay afloat and profitable.

In this blog, we’ll break down the changes, share actionable strategies to ease the burden and explain how Purple Accounts Warrington can help you navigate these changes with confidence.
The Current Tax Landscape in 2025
Corporation Tax Increase
From April 2023, corporation tax rose from 19% to up to 25% for businesses with profits exceeding £250,000. While this may not affect smaller companies earning below £50,000 (who remain at 19%), businesses within the marginal profit range (£50,001–£250,000) face a tapered rate.
Dividend Tax Changes
The dividend allowance has been slashed further in 2025 to just £500. This means small business owners who take dividends as part of their remuneration package could face higher tax liabilities.
Capital Gains Tax (CGT)
The CGT annual exemption has been reduced significantly, impacting those looking to sell assets or businesses.
Ongoing VAT Compliance
With the VAT threshold holding at £85,000, many businesses are still required to register and comply with Making Tax Digital (MTD) requirements.
These changes have made tax planning and financial management more critical than ever for small businesses.
5 Tax-Saving Strategies for Small Business Owners
Take Advantage of Allowances and Reliefs
Many small business owners overlook valuable tax reliefs. Ensure you’re maximising:
Annual Investment Allowance (AIA) for equipment or machinery purchases.
R&D Tax Credits if your business is innovating or developing new processes.
Employment Allowance, which reduces National Insurance bills by up to £5,000 per year for eligible businesses.
👉 Trusted resource: HMRC Tax Reliefs Guide
Review Your Business Structure
Are you operating as a sole trader, partnership, or limited company? With corporation tax rising, it might be time to reconsider your structure to minimise tax liabilities. Incorporation or disincorporation could save money depending on your profit levels and growth plans. Speak to an expert for advice.
Tax-Efficient Remuneration
Balance your salary and dividends to optimise tax efficiency. Be mindful of the £500 dividend allowance and review if pension contributions can be a better way to extract profits.
Plan for VAT Strategically
For businesses close to the £85,000 VAT threshold, consider how your pricing strategy impacts VAT registration. Once registered, review VAT schemes like the Flat Rate Scheme, which can simplify compliance for small businesses.
👉 Trusted resource: VAT and Making Tax Digital Guide
Outsource Financial Management
Time is money. Outsourcing your accounting and payroll ensures that you stay compliant with changing legislation, avoid penalties and free up time to focus on growing your business.
Key Compliance Tips for 2025
File and Pay on Time: Late tax payments or filings can lead to penalties and interest. Use HMRC’s online reminders or partner with an accountant to keep you on track.
Budget for Tax Liabilities: Set aside money monthly for taxes to avoid cash flow issues.
Stay Updated: Legislation can change quickly. Stay informed or work with experts who monitor updates for you.
How Purple Accounts Can Help
At Purple Accounts Warrington, we understand how challenging tax management can be for small business owners. That’s why we offer tailored accounting services to help you stay compliant, save money, and plan effectively for the future. We support busy business owners in Warrington and across the UK.
Here’s how we can support you:
Proactive Tax Planning: We work with you throughout the year to identify opportunities for savings and ensure you’re always tax-efficient.
HMRC Compliance: Our team ensures your filings are accurate and submitted on time, avoiding penalties.
Payroll and VAT Support: From Making Tax Digital to auto-enrolment, we handle the admin so you can focus on running your business.
Business Structure Advice: We’ll review your current setup and recommend changes to help you minimise tax and plan for growth.
👉 Get in Touch:
📞 Call us on 01925 979500
📧 Email us at enquiries@purpleaccounts.com
🌐 Visit our website: www.purpleaccounts.co.uk
Let Purple Accounts Warrington help you navigate the tax landscape with confidence and ease.
Blog correct at the time of writing. It's essential to consult with an expert.