A year after the government launched its Small Business Plan, the Wigan-based firm Fairhurst Accountants has taken stock of what the plan has actually delivered on tax, HMRC and business rates. The short answer, as reported by Wigan Today, is a mixed picture: good intentions on paper, slower progress on the ground, and a handful of changes that small firms genuinely need to prepare for now rather than later.
If you run an SME, the practical takeaway is this. The headline promises about finance, late payment and cutting red tape have not transformed daily life for most owners yet, but two concrete things are moving fast enough to plan around: the rollout of Making Tax Digital for Income Tax, and the long-running argument over business rates reform. This article breaks down what the review found, what it means for a small business, and the tools and steps that help you stay ahead.
What the Small Business Plan set out to do
The government’s Department for Business and Trade pitched the Small Business Plan as a package to make life easier for the UK’s 5.5 million small businesses. The broad themes were improving access to finance, tackling late payment, supporting exports, simplifying regulation, and modernising the way businesses interact with HMRC.
Those are the right targets. Late payment alone drains cash from thousands of viable firms every year, and access to affordable finance remains patchy. The question a year on is whether the plan changed anything you can feel in your bank account. Fairhurst’s assessment, in plain terms, is that the direction is sensible but the delivery has been uneven, and small firms should not wait for policy to rescue their cash flow, particularly given how badly late payment from big firms squeezes small suppliers.
Tax and HMRC: the changes that are actually happening
The most tangible shift for small businesses is not a grand new scheme but the steady march of digital tax. Making Tax Digital (MTD, meaning HMRC’s move to require digital record keeping and quarterly online updates) for Income Tax begins in April 2026 for sole traders and landlords with qualifying income above £50,000. A second wave, for those above £30,000, follows in April 2027, with a further tier planned below that.
What does this mean for a small business? If you are a sole trader or landlord over those thresholds, the days of a single annual self-assessment return are ending. You will need to keep digital records and send HMRC updates every quarter using compatible software. That is a bigger change of habit than of cost, and the firms that suffer are usually the ones that leave it until the last month.
Fairhurst’s review flags this as the single biggest near-term issue for the businesses it advises. It echoes wider warnings from the profession: our piece on how ACCA is warning sole traders about the HMRC self-assessment changes covers who is caught and by when. If you are a contractor or subcontractor, it is also worth reading how HMRC is tightening checks around labour fraud in construction, because compliance expectations are rising across the board.
Choosing MTD-ready software: a costed comparison
Because MTD is the change most likely to land on your desk first, getting the right software matters. The good news is that the UK market is competitive and there are strong British options alongside the American giants. Below is a comparison of tools UK small businesses would realistically shortlist. Prices are typical published starting rates before VAT and before any introductory discount, and they change often, so always check the vendor’s site.
| Tool | Best suited to | Typical starting price (per month, ex VAT) | Notable point |
|---|---|---|---|
| Xero | Growing businesses with employees or stock | Around £16 | Large app ecosystem, strong bank feeds |
| QuickBooks | Sole traders and small limited companies | Around £10 | Widely used, self-assessment tiers |
| FreeAgent | Freelancers and micro-businesses | Around £19 (free with some NatWest, RBS and Mettle accounts) | British-built, strong for contractors |
| Coconut | Sole traders and landlords facing MTD | Around £8 | UK specialist built around self-employed tax |
| Pandle | Very small firms watching every pound | Free core plan, paid tiers from a few pounds | British, genuinely free entry option |
| Sage | Established firms wanting a familiar name | Around £15 | Long UK track record, payroll add-ons |
Two names there are worth a second look if you have only ever considered the big four. Coconut is a UK specialist aimed squarely at sole traders and landlords preparing for MTD, and Pandle offers a free tier that suits a side business or a very lean micro-firm. If you want the wider view, our guide to the tools every UK owner should consider in 2026 sets these alongside the rest of your stack.
Business rates: still the unfinished job
Business rates were a central promise of the plan, and they remain the area where Fairhurst sees the most frustration. Retail, hospitality and leisure businesses have leaned on temporary relief for years, and small firms with a rateable value under £12,000 can qualify for 100% small business rates relief, tapering up to £15,000. The problem is that the wider system still feels punitive to bricks-and-mortar businesses competing with online-only rivals, and reform has been slow.
What does this mean for a small business? First, check you are claiming everything you are entitled to through your local council. Second, do not assume the plan has fixed the underlying issue: the campaigning continues, as our report on how the British beauty industry is pressing for business rates reform shows. High street operators watching related pressures should also see how councils are gaining new powers over vape and betting shops, because local policy is shifting quickly.
Finance and late payment: the gap between plan and reality
The plan talked a good game on access to finance and on curbing late payment, two problems that strangle otherwise healthy firms. Progress here is where the year-on review is most cautious. Lending exists, but confidence to ask for it is weak, a pattern we explored in why weak SME lending confidence stops small firms seeking finance. On late payment, the culture of large firms paying slowly has proved stubborn, as our investigation into why the UK’s biggest firms are the worst payers laid out.
The practical message from Fairhurst’s assessment is not to wait. Tighten your own invoicing terms, chase promptly, and know where genuine funding sits. Providers such as Funding Circle and challenger lenders continue to serve SMEs, and our coverage of the recent £500m Funding Circle facility shows the market is still active.
FAQ
What is the Small Business Plan?
It is the government’s package of measures aimed at helping UK small businesses, covering access to finance, late payment, exports, regulation and modern tax administration. Fairhurst Accountants reviewed how much it has delivered after roughly a year, concluding the ambitions are sound but the everyday impact so far is modest.
Does the plan change my tax deadlines?
Not directly, but the wider modernisation agenda it sits within does. Making Tax Digital for Income Tax starts in April 2026 for sole traders and landlords with qualifying income over £50,000, moving to over £30,000 in April 2027. Affected people will file quarterly digital updates instead of one annual return.
Do I need new software for Making Tax Digital?
If you are within scope, yes: you will need HMRC-compatible software to keep digital records and submit updates. Options range from free tiers like Pandle to specialists like Coconut and full packages from Xero, QuickBooks, FreeAgent and Sage. Ask your accountant which fits your setup before you commit.
Has the plan cut my business rates?
For most firms, not yet in any transformative way. Small business rates relief still applies for lower rateable values, but broader reform remains a work in progress. Check with your local council that you are claiming every relief you qualify for.
Should I wait for the plan to help with finance?
No. Fairhurst’s assessment suggests treating policy as a slow-moving backdrop rather than a rescue. Tighten your invoicing, chase late payers, and research active lenders now rather than waiting for the system to improve around you.
What to do next
- Check if MTD for Income Tax applies to you. If you are a sole trader or landlord near the £50,000 or £30,000 thresholds, confirm your position and pick compatible software this year, not next.
- Review your business rates relief. Contact your local council to make sure you are receiving every relief your rateable value allows.
- Fix your own late-payment habits. Shorten payment terms, automate reminders through your accounting tool, and know which lenders serve businesses like yours before you need the cash.
- Talk to an accountant. A short conversation with a firm like Fairhurst now is cheaper than a scramble when quarterly filing lands.
