Running a small business can be really rewarding, but there are challenges too – especially when it comes to keeping up with small business taxes in Peterborough – as the rules seem to change every year.
As accountants who work with many local business owners, we know how easy it is for busy entrepreneurs to lose track of key deadlines, deductions, or HMRC updates.
This guide breaks down the main things Peterborough small business owners need to know about taxes in 2025 – and how you can stay compliant while keeping more of your hard-earned profit.
1. Understand the 2025 tax thresholds
The 2025/26 tax year brings a few important changes to thresholds that affect small businesses:
Corporation Tax: The main rate remains at 25%, but companies with profits under £50,000 still benefit from the small profits rate of 19%.
National Insurance: The government has reduced Class 4 National Insurance for the self-employed to 6%, offering some relief to sole traders.
Personal Allowance: The £12,570 personal allowance continues to apply, meaning many directors and small business owners can structure income efficiently.
These changes might sound minor, but they can significantly affect your take-home pay – especially if your income straddles multiple thresholds. A local accountant like us can help you plan distributions and salaries to minimise unnecessary tax.
2. Keep your books digital and HMRC-ready
With Making Tax Digital (MTD) now fully rolled out for VAT-registered businesses, and soon to apply to Income Tax Self-Assessment (ITSA), 2025 is the year to ensure your bookkeeping system is fully digital.
Using cloud software such as Xero or QuickBooks not only keeps you compliant but also gives you real-time insight into your cashflow and tax liabilities.
At Thobani Accountants, we’ve helped many Peterborough businesses transition smoothly to MTD – avoiding penalties and saving hours of admin each month.
3. Claim the right deductions
Many small businesses in Peterborough still miss out on allowable expenses each year. Commonly overlooked deductions include:
- Home office and utilities (for those running businesses from home)
- Mileage and travel costs for local client visits
- Professional fees, training, and subscriptions
- Capital allowances on equipment or vehicles
These add up quickly. A well-structured expense strategy ensures you only pay what’s truly owed, and nothing more.
4. Plan ahead for VAT
If your annual turnover exceeds £90,000, VAT registration is mandatory. Even if you’re under the threshold, voluntary registration can make sense for certain businesses — particularly if your clients are VAT-registered or if you have significant VATable expenses.
We often advise Peterborough businesses on when to register and how to use VAT schemes (like the Flat Rate Scheme) to simplify reporting.
5. Look out for local opportunities
Peterborough continues to grow as a hub for logistics, professional services and creative industries. The Cambridgeshire & Peterborough Combined Authority frequently announces grants, apprenticeships, and innovation funding for small firms.
Keeping an eye on local business support schemes can make a real difference – and your accountant should be helping you identify those opportunities.
6. Get expert support – before it’s urgent
Tax planning shouldn’t be a once-a-year panic. With early, proactive advice, you can forecast your liabilities, manage cashflow, and set aside the right amount before deadlines approach.
At Thobani Accountants, we specialise in supporting small businesses across Peterborough with practical, year-round tax guidance. Whether you’re just starting out or scaling up, we’ll help you stay compliant and confident about your financial future.
Ready to take control of the 2025/26 tax year?
If you’re a Peterborough-based business owner looking to simplify your tax life, get in touch today.
We’ll help you understand your numbers, plan ahead, and make sure you’re getting every allowance and deduction you deserve. Contact us today!
