bOnline Welcomes Small Business Tax Reforms

By Emma Lewis, bOnline.

A range of new government tax reform ideas have been discussed recently, aimed at easing pressures on small and medium-sized enterprises (SMEs) across the UK.

The proposals are designed to make it easier for smaller businesses to grow, hire and invest, with a broader goal of simplifying the tax system and reducing financial strain on entrepreneurs. 

Any support for our small business heroes is welcomed by bOnline.

Corporation Tax

One of the biggest proposed changes is to raise the minimum profit threshold for Corporation Tax to £100,000. This could exempt more than a million SMEs from paying Corporation Tax altogether, freeing up valuable cash flow for reinvestment, staff training or business development.

Longer term, there are also plans to gradually reduce the main Corporation Tax rate from 25% to between 20% and 15%. For small businesses, these adjustments could make a real difference to profit margins and competitiveness, especially for growing firms that reinvest their earnings back into the business.

Business Rates

Another key reform would see business rates abolished for high-street-based SMEs. This change could provide a major boost to local retailers, independent cafés, salons and service providers – the kinds of businesses that bring life to UK town centres.

To balance this, a new 4% online delivery tax on large multinational e-commerce corporations has been proposed. The goal is to level the playing field between online retail giants and bricks-and-mortar shops, giving local businesses a fairer chance to compete.

VAT Threshold

Raising the VAT registration threshold to £150,000 is another idea on the table. For small traders and sole traders, this would ease a major administrative burden, reducing accounting costs and allowing them to focus on growth before facing complex VAT obligations. It’s a change that could encourage more entrepreneurs to start and scale their businesses without being held back by red tape.

IR35 And Freelancers

The proposed abolition of IR35 off-payroll working rules could simplify tax arrangements for contractors, consultants and self-employed professionals. For the UK’s thriving freelance and gig economy, this could mean more flexibility, less confusion and more opportunities for growth – helping businesses and individuals alike adapt to modern ways of working.

Simplification And Incentives

Beyond these headline changes, there’s also a push to streamline the entire UK tax code. A clearer, more predictable system could save small businesses both time and compliance costs, while creating a fairer environment for everyone. Additional incentives are also being discussed, such as tax relief for businesses offering apprenticeships and new tax breaks for pharmacies and companies operating in the UK defence sector.

A Step Forward For Small Business Heroes

If these reforms go through, it could reshape the financial landscape for UK SMEs. 

“Small businesses are the backbone of the UK economy, yet they’re often the ones most affected by complex and shifting tax rules. Any move that helps simplify things or ease the financial strain is a step in the right direction.

At bOnline, we’ve always championed small businesses – giving them the digital tools, connectivity and confidence they need to grow and compete on a level playing field.”
– Anthony Karibian, CEO, bOnline