If you are self-employed, it is important to understand which car and travel costs can be claimed.

You can claim allowable business expenses for car, van, or travel costs, which reduce your taxable profit. Typical allowable costs include:

• Vehicle insurance
• Repairs and servicing
• Fuel
• Parking
• Hire charges
• Vehicle tax and licence fees
• Breakdown cover
• Train, bus, tram, air, and taxi fares
• Hotel rooms
• Meals on overnight business trips

You cannot claim for:

• Non-business driving or travel costs
• Fines or penalty charges
• Personal travel, including commuting between home and a regular workplace, is generally not allowable.

For vehicle costs, you may choose between claiming actual costs or using HMRC’s simplified expenses which is a flat-rate allowance for mileage.

If you buy a vehicle for your business, how you claim the cost depends on your accounting method. Under traditional accounting, you can claim capital allowances on the purchase cost. If you use cash basis accounting, you can also claim capital allowances as long as you are not using simplified expenses. For all other types of vehicles or associated costs, you can claim them as allowable business expenses.

The Additional State Pension is only available to those who reached the state pension age before 6 April 2016 and are receiving the Old State Pension. The Additional State Pension is an extra amount of money paid on top of the basic Old State Pension.

The Old State Pension is designed to provide individuals of state pension age with a basic regular income and is based on National Insurance Contributions (NICs). To get the full basic State Pension, most people need to have had 35 qualifying years of NICs.

Claimants will automatically have received the Additional State Pension if they were eligible for it. Those who had contracted out were not eligible for the Additional State Pension.

If your spouse or civil partner dies, you may be able to inherit some of their Additional State Pension if you reached State Pension age before 6 April 2016. If you do not receive the full basic State Pension, you may be able to increase it by using your spouse or civil partner’s qualifying National Insurance years.

You may also be able to inherit part of their Additional State Pension or Graduated Retirement Benefit. Different rules apply if you reached State Pension age on or after 6 April 2016. If relevant, you should contact the Pension Service to check what you can claim.

Over the past week, one topic has dominated discussion among UK businesses, rising employment costs and the difficult decisions they are forcing on employers. This issue is particularly visible in the retail and hospitality sectors, but the underlying pressures apply across much of the economy.

Employers are facing a combination of higher National Living Wage rates, increased National Insurance costs, and wider employment compliance obligations. While each individual change may appear manageable, together they represent a significant increase in the cost of employing staff. For labour intensive businesses operating on tight margins, this can quickly become unsustainable.

Recent commentary has highlighted that many retailers are responding by cutting staff hours, delaying recruitment, or in some cases reducing headcount altogether. These are rarely decisions taken lightly. For many business owners, staff are their largest single cost and also their most valuable asset. However, when wage bills rise faster than turnover, something has to give.

Beyond direct wage costs, there is also growing concern about employment law complexity and reduced flexibility. Employers are increasingly cautious about taking on permanent staff, particularly where demand is uncertain. This has knock on effects for productivity, staff morale, and long term growth planning.

For business owners, the challenge is not just about cost control, but about sustainability. Short term fixes such as reducing hours may protect cash flow, but they can also affect service quality and customer experience. In competitive markets, this can be risky.

From an advisory perspective, these pressures reinforce the importance of forward planning. Regular management accounts, cash flow forecasting, and scenario modelling can help businesses understand the impact of rising employment costs before problems become acute. In some cases, restructuring roles, investing in systems, or adjusting pricing may be more effective than across the board cost cutting.

The wider debate also raises policy questions about how employment costs are shared between employers, employees, and the state. For now, however, business owners must deal with the reality in front of them. Rising employment costs are not a theoretical issue, they are already shaping staffing decisions across the UK economy.

The UK Government has launched a new campaign urging businesses to strengthen their defences against cybercrime, reflecting growing concern about the scale and cost of online attacks on UK firms. The announcement, published on gov.uk this week, has attracted strong interest from business owners, particularly small and medium sized enterprises that may lack dedicated IT or cyber security resources.

Cybercrime remains a material business risk

Cyber threats are no longer limited to large organisations. Recent government data shows that a significant proportion of small businesses experience cyber incidents each year, ranging from phishing attacks and ransomware to data breaches and system disruption. While some incidents are minor, others can have serious financial and reputational consequences, particularly where customer data is compromised or trading activity is interrupted.

For many owner-managed businesses, the real risk lies not only in the immediate cost of dealing with an attack, but also in lost productivity, delayed invoicing, strained customer relationships, and increased insurance costs.

Practical steps promoted by the campaign

The government campaign focuses on simple, practical actions that businesses can take to reduce their exposure to cyber risks. These include keeping software and systems up to date, using strong passwords and access controls, backing up data regularly, and ensuring staff are aware of common cyber threats.

A key element of the guidance is encouraging businesses to work towards Cyber Essentials certification. This is a government-backed standard that helps organisations put basic technical controls in place and demonstrates to customers and suppliers that appropriate safeguards are being taken.

Financial implications for business owners

From a financial planning perspective, cyber security is increasingly relevant. A serious cyber incident can place unexpected strain on cashflow, disrupt trading, and force businesses to divert funds away from growth or investment plans. In extreme cases, it can threaten the long-term viability of the business.

Lenders, insurers and commercial partners are also paying closer attention to cyber risk management. Businesses that can demonstrate good controls may find it easier to secure finance, insurance cover, or new contracts.

An opportunity for proactive review

This government announcement provides a useful prompt for business owners to review their current systems and processes. It also creates an opportunity for advisers to raise cyber risk as part of wider business planning discussions, alongside cashflow management, insurance, and resilience planning.

As cybercrime continues to evolve, taking sensible preventative steps now can help protect both the financial health of the business and the peace of mind of its owners.

Today the Office for National Statistics confirmed that UK inflation has fallen to 3.0 per cent in the year to January 2026, the lowest rate seen in about ten months and down from 3.4 per cent in December. This brings good news for households and businesses dealing with high costs, particularly as it follows a period of elevated inflation and cost-of-living pressures. 

Likely reaction from Bank of England

Inflation is measured by the Consumer Prices Index and it remains above the Bank of England’s 2 per cent target, but the recent decline, driven by slower increases in food and petrol prices, has strengthened market expectations that monetary policy could soon ease. 

For businesses and their advisers one of the key questions this week is how this will affect interest rates. The Bank Rate currently stands at 3.75 per cent, where it was held at the last Monetary Policy Committee meeting. At that meeting policymakers emphasised the need to be confident inflation stays near target before cutting, but they also pointed to the likelihood of further reductions this year if data continue in the right direction

Will interest rates fall?

With inflation now on a clearer downward path and officials forecasting a return to the 2 per cent target by spring, futures markets are pricing in a strong chance of a rate cut at the Bank of England’s next decision in March. Many economists expect a 25 basis point reduction, potentially taking the Bank Rate down to around 3.5 per cent, and some see scope for further cuts later in the year if price pressures continue to ease. 

For clients with borrowing or refinancing plans this shift could mean slightly cheaper credit costs and a more supportive environment for investment decisions in the months ahead. If inflation continues to moderate as expected, both households and businesses may start to benefit from lower interest rate settings before long.

Many UK businesses are trading through a period of prolonged economic uncertainty. Costs remain high, consumer confidence is fragile, and access to finance is tighter than it was only a few years ago. In this environment, protecting cash flow and maintaining adequate cash reserves has become more important than chasing short term growth or headline profits.

Profit does not pay the bills

It is easy to focus on profitability when reviewing business performance, but profit and cash are not the same thing. A business can appear profitable on paper while still struggling to meet day to day commitments. Slow paying customers, rising stock levels, or large tax liabilities can all drain cash even when sales look healthy.

Cash flow is what keeps wages paid, suppliers onside, and tax deadlines met. When cash becomes tight, decision making often becomes reactive. This is when businesses are most likely to take on expensive finance, miss opportunities, or make rushed decisions that create longer term problems.

Why cash reserves matter more now

Cash reserves provide breathing space. They allow business owners to absorb short term shocks such as a late paying customer, a sudden increase in costs, or an unexpected tax bill. In a more volatile economy, these shocks are becoming more common rather than exceptional.

Holding reserves also gives businesses options. It allows time to renegotiate contracts, adjust pricing, or change direction without immediate pressure. Businesses with no buffer often find themselves forced into decisions by external events rather than making deliberate choices.

Managing uncertainty and confidence

Economic uncertainty affects behaviour. Customers may delay spending, lenders may be more cautious, and suppliers may tighten credit terms. All of this places additional strain on cash flow at exactly the wrong time.

Strong cash management helps restore confidence. Business owners who understand their cash position are better placed to plan, communicate with stakeholders, and spot issues early. This is not about pessimism, but realism. Preparing for slower periods is a sensible response to uncertainty, not a sign of weakness.

Practical steps to protect cash

Protecting cash flow often starts with small, practical actions. Reviewing payment terms, tightening credit control, and monitoring cash forecasts regularly can make a significant difference. Planning for tax liabilities in advance and setting funds aside reduces the risk of unpleasant surprises.

In uncertain times, cash is more than just a number on the balance sheet. It is resilience, flexibility, and peace of mind. Businesses that prioritise cash flow and build sensible

reserves are better equipped to weather current difficulties and put themselves in a stronger position for recovery when conditions improve.

A UK parliamentary report has been widely covered this week warning that small firms are operating under pressures similar to those seen during the pandemic, but without equivalent support. The business and trade committee highlighted rising taxes, high energy costs, crime and chronic late payments as factors threatening the survival of many local firms, with calls for urgent reforms across business rates, policing, VAT thresholds and access to public sector contracts. The government has pointed to a support package, but MPs argue more comprehensive measures are needed to stabilise the SME sector. This issue has been one of the most substantive business developments in UK press coverage.

Broader business coverage in daily news roundups General daily business headlines this week from national news services have included a range of topics from markets to trade, but do not single out any one global event above all others. These roundups include developments across national, international and market segments without a dominant singular business story emerging.

Economic backdrop from data and analysis Separate rolling coverage on the UK economy indicates slow growth and business investment concerns, with media reports on marginal GDP expansion and its implications for investment and jobs. While this theme underpins much business sentiment, it has been less overtly highlighted as a front-page topic compared with the small business pressures report.

In summary, the theme attracting most press attention recently has been the challenges facing small and medium sized enterprises, particularly as highlighted by a parliamentary committee calling for urgent policy action to support the SME sector. It has generated sustained media coverage because it directly affects a large portion of the UK private sector and ties into broader economic concerns about growth, inflation and business confidence.

We can help

If the above comments resonate with your present business experiences, there are remedies, strategies you can employ to counter these economic stresses and strains. Please call so we can help you consider your options.

Many business owners and individuals only think about tax when a deadline approaches or a tax bill arrives. While this is understandable, leaving tax planning until the last minute often limits the options available and can result in higher overall costs.

Tax planning is most effective when it is forward-looking. Decisions made earlier in the year give more flexibility and allow planning to be aligned with real commercial activity, rather than being forced into rushed actions that may not be optimal. Last-minute planning tends to focus on damage limitation rather than improving outcomes.

A common example is pension planning. Reviewing contributions in March gives limited scope if cash flow is tight or allowances have already been used. By contrast, reviewing pension strategy earlier in the year allows contributions to be phased, employer contributions to be considered, and carry forward allowances to be used more effectively.

The same principle applies to profit extraction for company directors. Decisions around salary, dividends, and employer pension contributions are best reviewed in advance, not after profits have already been drawn. Similarly, capital expenditure planning, use of capital allowances, and timing of asset disposals are far more effective when considered ahead of time.

Another issue with last-minute planning is that it often overlooks wider consequences. Actions taken purely to reduce tax in the short term can affect cash flow, future tax years, or long-term business goals. Proper planning considers these knock-on effects.

Regular tax reviews spread across the year help avoid surprises and allow adjustments as circumstances change. They also create space for broader conversations about growth, succession, and personal financial goals, rather than focusing solely on compliance.

In short, tax planning is not about clever tactics at the year end. It is about making informed decisions throughout the year. Clients who move away from reactive behaviour and towards regular planning usually find they pay the right amount of tax, at the right time, with far less stress.

For many people, pensions are seen as something to think about later in life rather than as part of annual tax planning. In reality, reviewing pension contributions before the end of the tax year on 5 April can be one of the most effective ways to reduce a current tax bill while also strengthening long-term financial security.

The key reason pensions are so powerful is the tax relief available on contributions. Money paid into a registered pension scheme benefits from income tax relief, which effectively boosts the value of the contribution. Basic rate taxpayers receive relief at 20 per cent, while higher and additional rate taxpayers can receive relief at 40 per cent or 45 per cent, subject to the rules.

Where pension planning becomes particularly valuable is for individuals whose income falls within certain bands. Those with income over £100,000 begin to lose their personal allowance, creating an effective marginal tax rate of up to 60 per cent. Similarly, families affected by the High Income Child Benefit Charge can face unexpectedly high marginal rates once income exceeds £60,000. In these situations, a pension contribution can reduce adjusted net income and restore allowances or reduce charges, often producing a much larger tax saving than expected.

For the 2025-26 tax year, the standard annual allowance is £60,000, covering all personal and employer contributions. Contributions are usually capped at 100 per cent of relevant UK earnings, although individuals with low or no earnings can still contribute up to £3,600 gross. Higher earners should be aware of the tapered annual allowance, which can significantly reduce the amount that qualifies for relief.

It is also important not to overlook the carry forward rules. Unused allowances from the previous three tax years may be available, allowing much larger contributions in a single year, provided the conditions are met.

A pension review before 5 April is not just about retirement planning. It is about understanding how pensions fit into wider tax planning and using the rules as they stand to make informed decisions. Taking advice before the year end ensures opportunities are not missed.

The government recently announced significant changes to the planned reforms to Agricultural Property Relief (APR) and Business Property Relief (BPR). The threshold for 100% relief will be increased from £1 million to £2.5 million when the changes take effect from 6 April 2026. The change will be introduced via an amendment to the Finance Bill 2025 with relief reduced to 50% on qualifying assets above the new level.

Spouses or civil partners will be able to pass on up to £5 million of qualifying agricultural and business assets between them free of inheritance tax, in addition to the existing nil rate bands. The transferable allowance will also apply to surviving spouses or civil partners who were widowed before the new policy was announced.

These changes adjust the reforms first announced at Autumn Budget 2024, which had attracted strong criticism from the farming community and rural businesses over the potential impact on small farms and family-owned enterprises. By raising the threshold, the government aims to significantly reduce the number of estates affected by higher inheritance tax charges, ensuring that the reforms are focused primarily on the largest estates.

The government estimates that around 85% of estates claiming APR in 2026-27, including those also claiming BPR, will pay no additional inheritance tax as a result of these changes.

Shares designated as “not listed”, such as those traded on AIM, will attract BPR at a flat rate of 50% (reduced from 100%) from April 2026. This measure was unaffected by the latest announcement.