10 Key Changes Small Businesses Planned To Make This Tax Year

According to new Intuit QuickBooks research, almost 100% (99.6%) of UK small businesses planned to change how they operate in the current tax year — 41% predicted these changes would be radical. 

We asked these small businesses more about the adjustments they plan to implement in the next 12 months in order to provide ideas and advice to other small business owners — read on to find the top ten biggest changes!

1. Implement AI 

According to our research, 52% of UK small businesses plan on using AI to enhance the efficiency of their operation. AI has been a huge development in recent years — it can now accurately understand, interpret and generate human language and create images. 

Due to the range of tasks AI can help with and the tools available, the possibilities for using it within a business are endless! According to Forbes Advisor, a few common uses for AI within business include:

• Customer service

• Cybersecurity/fraud management 

• Digital personal assistants

• Customer relationship management

• Inventory management

Whatever industry you work in, there will likely be a task that AI can help with, whether it's creating a business logo, writing customer emails, or supporting product descriptions.

2. Reduce tax liabilities

Reducing tax liabilities, in compliance with all laws and regulations, is something that 50% of businesses want to explore and find solutions for in the new tax year. The benefits of reducing tax liabilities include increased profitability, improved cash flow and financial stability. 

Businesses can implement several strategies to reduce their tax liabilities legally, such as: 

• Keeping up with tax law changes to adapt tax planning strategies.

• Hiring a tax professional to oversee and advise on anything tax-related.

• Exploring tax incentives and taking advantage of them.

• Taking advantage of deductions to reduce the taxable income.

• Deducting allowable business expenses from taxable profits.

Reducing tax liabilities can free up resources that can be put elsewhere within the business, supporting other aspects such as hiring, innovation, financial health and expansion, and business growth.

3. Invest in skills and training for staff

Just under half (49%) of small businesses want to invest in upskilling existing staff and providing them with further training. 

There are various benefits to upskilling existing employees that can help a small business immensely. Although it’s great to recruit new staff, it can become costly — upskilling can save both time and resources needed for recruiting. Upskilling staff can also fill or prevent skills gaps such as communication and managerial skills, and keep businesses running smoothly.

Upskilling provides staff with additional skills to help improve their performance and prepare them for any potential new roles and responsibilities. Businesses that prioritise existing staff are seen as caring, which can improve employee productivity and morale, reducing the risk of turnover which is another expense to businesses. 

4. Invest in new technology

It can be difficult to keep up with the constantly changing technology, which could be why 49% of businesses surveyed want to invest in new technology.

Whether it's technology to improve customer service, support marketing goals, or improve bookkeeping, it can massively help with business growth and success. Certain technologies can also reduce costs and save time, allowing staff to put their focus on other areas of the business.

Many government grants are available that can help with this business goal, as many focus on promoting innovation and technological advancements. The grants motivate small businesses to invest in research and development which in turn helps them remain competitive as they adopt new technologies and aid creativity. 

5. Upgrade financial management systems

Just under half (48%) of small businesses within the UK were keen to update their financial management systems in the new tax year. 

Financial management is an extremely important aspect of any business, no matter the size. Having an effective financial management system in place, like an automation software like QuickBooks, brings a range of benefits. 

Financial management systems can help increase staff productivity due to many having an automated system — this allows staff to focus on other business areas. Automated systems also mean there are fewer chances of human errors and mistakes. Additionally, many systems offer real-time data on expenditure, providing an instant overview, which can result in more accurate financial planning and the ability to predict cash flow needs.

6. Pay closer attention to potential tax rebates

A range of business tax relief options can help support small businesses by recouping some of the tax they pay or reducing their tax bill, taking away some of the financial burden running a business can cause. According to our research, 44% of small businesses want to pay closer attention to the available tax rebates — many UK businesses don’t take advantage of these available relief opportunities. 

Some options include National Insurance relief (employment allowance), small business rate relief, VAT relief and many more. 

7. Improve Digital record-keeping

Digital record keeping is vital for small businesses, so it's no surprise that 44% want to improve this aspect. There are so many benefits to digital record keeping, from stress-free expense tracking to tax benefits, and more free time for other business aspects!

Not only does digital record-keeping help manage financial records, it's also a legal requirement. The Making Tax Digital (MTD) government initiative requires VAT-registered businesses to retain digital records and file VAT returns via software. Retaining records can also hugely reduce self-assessment stress — storing and organising the required documentation will ensure it’s easy to find, reducing the chances of mistakes, delays and potential fines. 

Some ways of improving digital record keeping include auditing records often, knowing what to retain and how long for, and using a software tool to help. 

8. Apply for Financing

According to Finder, in 2023 just 30% of SMEs applied for external finance — the lowest number in the last five years. This drop is potentially due to the current cost of living crisis and businesses worrying about repaying. 

Our research found that 43% of UK small businesses want to apply for finance in the new tax year to support business growth. Finance can help a business grow in a range of different ways, it can:

• Allow the company to hire more staff

• Provide the opportunity to move to a bigger premise

• Launch new products or services

• Invest in new tools and technology 

• Cover finances during quieter periods of business

And so much more! 

9. Hire an accountant or tax advisor

Unfortunately, many small businesses don’t hire an accountant, likely due to not fully understanding just how important it is for their success! Of course, businesses want to save money, but not hiring an accountant or tax advisor is not a corner to cut. 

Businesses that don’t hire an accountant face risks, such as bookkeeping errors becoming costly, not complying with government regulations, and missing important tax deductions. 

Hiring an accountant can help business growth by saving time and money that can be put elsewhere within the company. Accountants can also provide great business advice, and ensure everything runs smoothly and accurately in terms of finance and bookkeeping. 

Thankfully, 41% of small businesses planned to hire a new accountant or tax adviser in the current tax year. 

10. Hire additional workers

Our survey revealed that 36% of UK small businesses planned to hire new staff in this tax year, a big part of business growth. Hiring new staff can be daunting for a small business with limited resources, a small pool of candidates, and a tight budget. 

Despite the potential financial strain, hiring new staff is important and hiring too late could negatively affect your business. It can be difficult to know when to hire new staff, but the time may have come if: 

• Certain skills are required

• You’re launching a new product/service

• You’re having to turn away new clients/work

• Overtime costs are rising due to a large workload

• There’s a lack of opportunity for annual leave

The beginning of a tax year is the perfect time for small businesses to review their operations and focus on what they can improve, change, or implement to support growth. We’re excited to see whether these changes are made, and the impact on UK small businesses!

Intuit QuickBooks commissioned an online survey with Pollfish completed by 1,708 small business owners and decision-makers (adults aged 18+) throughout the UK in March 2024.

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