2025 Key Events and Predictions For UK Small Businesses and Individuals

As we step into 2025, the landscape for small businesses and private individual finances in the UK is set to be shaped by a series of key events, economic trends, and evolving market dynamics. Simon Pinion, Business Advisory Partner at Scrutton Bland takes a comprehensive look at what to expect in the coming year.

Financial Predictions for 2025

Economic Growth

The UK economy is projected to achieve modest growth in 2025, with a 1.6% increase in GDP. However, some commentators are predicting a brief recession ahead of a return to growth. Business confidence has declined significantly in the last quarter of 2024, with 49% of respondents expecting their turnover to increase over the next 12 months, down from 56% in Q3. [1]

The decline is largely due to recent budget announcements, which are likely to lead to rising operational costs. The expected growth will be driven by household consumption and government spending.

Inflation

Inflationary pressure is another concern. Recent budget changes, including increases in National Insurance for Employers and national minimum wage rates, will undoubtedly lead to higher prices as businesses look to pass on rising operating costs. Some commentators predict inflation could rise to 3% or above in 2025, although it’s not expected to reach the higher levels experienced in recent years.

Technology

Technological advancements, particularly in AI, will continue to play a pivotal role in reshaping UK industries. Businesses will increasingly adopt AI to find efficiencies, automate administrative tasks, enhance consumer interactions, and provide predictive business insights. This wider AI adoption is expected to accelerate in 2025.

Interest rates

Interest rates are also a key factor. The expectation of rising inflation in 2025 will likely dampen the Bank of England’s appetite for rate cuts, which may only involve a couple, possibly not coming until later in the year.

Sustainability

Sustainability is becoming more of a necessity rather than just a buzzword. Government regulations and finance lenders are increasingly incorporating sustainability into their requirements.  And small businesses who adopt green practices will likely gain favour and an edge with consumers, who are increasingly looking for more environmentally conscious options.

Key Dates in 2025 for Small Businesses

• 1 January : Energy Price Cap increases from £1,717 to £1,738 [1].
• 26 March: Spring Forecast event, with no expected tax change announcements.
• 1 April: National Minimum Wage increases for over 21s to £12.21 (6.7% increase) and for 18-20 year olds to £10.00 (16.3% increase).
• 6 April: New tax year begins.
• 6 April: Employers National Insurance rate increases to 15% from 13.8%, with the nil rate threshold reducing to £5,000. This is partially offset by an increase in Employment Allowance to £10,500 from £5,000.
• 6 April: Company car tax appropriate percentage increases by 1% across all thresholds.
• 6 April: Company size thresholds increase.
• 6 April: Business rates standard multiplier increases to 55.5 pence, while the small business multiplier remains frozen at 49.9 pence.
• 6 July: P11d submission deadline.

Key Dates for Personal Finances

• 31 January : Self-assessment tax returns and payments deadline.
• 6 April: New tax year begins.
• 6 April: Capital Gains Tax business asset disposal relief and investors relief increases to 14% from 10% [1].
• 6 April: Residence-based regime for foreign income and gains begins, ending the concept of domicile in tax regulations. A Temporary Repatriation Facility (TRF) will be available for three years to taxpayers who previously used the remittance basis. Individuals can elect to pay tax at the TRF rate of 12% in the 2025/26 tax year on offshore funds they designate. The designated funds will not then be taxed on remittance to the UK.
• 6 April: Stamp Duty Land Tax temporary threshold increases end, with the nil rate threshold reducing to £125,000 (£300,000 for first-time buyers).
• 7 April: State Pension and Benefits increase by 4.1%.
• 31 July: Payment on account deadline.
• 5 October : Self-Assessment Registration deadline for taxpayers to inform HMRC if they need to complete a tax return for the 2024/2025 tax year.
• 30 December: Self-Assessment return filing deadline for those who wish to have any outstanding tax collected through their PAYE tax codes.

Thoughts on the Year Ahead

2025 promises to be a year of both challenges and opportunities for small businesses and individuals in the UK. Rising operational costs and new fiscal policies will require businesses to adapt and innovate. However, technological advancements and a focus on sustainability offer promising pathways for growth. For individuals, evolving market dynamics and investment strategies will necessitate a proactive approach to wealth management.

Overall, staying informed and agile will be key to navigating the complexities of the year ahead. Whether you’re a small business owner, managing your personal finances or both.

But as ever, challenges and opportunities hold the potential for significant growth and transformation.

For tailored advice designed to protect your business, your wealth and your assets throughout 2025 and beyond, the team at Scrutton Bland are here to help. Get in contact by calling 0330 058 6559 or by emailing us hello@scruttonbland.co.uk

[1] British Chamber of Commerce