SSP changes affecting Employers and Employees
From 6th April 2026, there will be no three-day sick pay waiting period.
Statutory Sick Pay will be payable from the first full day of sickness absence and will be available to more employees.
Why the changes?
It is to ensure that lower-paid employees have financial security when they are unwell, and to prevent the risk of infection within the workplace.
Key Points
1. Statutory Sick Pay will be available to all eligible employees regardless of their earnings (the Lower Earnings Limit is being removed).
2. Statutory Sick Pay will be payable from the first full day of sickness absence (the three-day waiting period is being removed).
3. The rate of Statutory Sick Pay for all employees will be calculated at 80% of their average weekly earnings or the flat weekly rate, whichever is lower.
What can you do now?
1. Review your sickness absence policies and prepare updates to any references to waiting periods or earnings thresholds.
2. Check with your payroll provider how the changes will affect your payroll system.
3. Communicate the changes to your management teams and staff.
Whilst employment costs continue to increase, there is never a better time to review costs and budgets for the year, whilst tracking your cash flow every week.
For more info about SSP, please get in touch or visit www.gov.uk
Use this guide to help track which business expenses you can claim to reduce your taxable income. Remember, there is no right or wrong answer - a claim has to be wholly and exclusively for business purposes. 🏠 Office & Working from Home Stationery (pens, paper, printer ink) Postage and packaging Office furniture (desk, chair – if wholly for business) Software subscriptions (eg. Microsoft 365, Zoom, Canva) A portion of: Rent or mortgage interest Electricity Internet and phone bills Council tax or water (if applicable) Or you can use HMRC's flat rate based on hours spent working from home 📱 Phone & Internet Business mobile contract or phone use A proportion of personal mobile/internet bills used for business 🚗 Travel Expenses Public transport (train, bus, taxi fares for business trips) Business mileage (you can use HMRC’s flat rate: 45p/mile for the first 10,000 miles) Parking fees Hotel accommodation (business trips only) Meals while travelling for work, or taken outside your usual routine 💻 Equipment & Tools Computers, tablets, monitors Trade-specific tools or supplies Cameras, lighting, tripods (if business-related) Software and app purchases Repairs or maintenance of business tools 📣 Marketing & Advertising Website design and development Domain names and hosting Online ads (Google, Facebook, Instagram) Flyers, brochures, business cards Graphic design or branding services 👥 Staffing & Freelancers Wages paid to staff Payments to subcontractors or freelancers Employer’s National Insurance contributions (if applicable) ⚖️ Legal & Financial Accountant or bookkeeper fees Business insurance (e.g., public liability, professional indemnity) Bank charges on business accounts Business loan interest Legal advice directly related to your business ❗ Important Reminders: 🚫 Not Allowable: Everyday clothing (unless it’s protective or a uniform) Personal meals (unless on a business trip) Client entertainment (e.g., meals, events) Fines and penalties Personal portion of any mixed-use services (mobile, internet, etc.) 📂 Stay Organised: Keep all receipts and invoices Log all expenses regularly Use accounting software or a spreadsheet Consider getting advice from a bookkeeper/accountant If in doubt, please ask a finance professinal.
"I am nervously monitoring my sales turnover because I am getting close to the £90K threshold, and feeling a sense of dread. How do I even become VAT-registered? How does it work? My customers will run if my prices go up. It feels better to avoid it and keep the business small". The vicious circle begins. Turning work down and avoiding an opportunity to scale. Running the business becomes exhausting for little return. When a business reaches £90K turnover, it starts to collect VAT (Value Added Tax) on behalf of HMRC. We have a solution! It starts with managing the cash flow, opening a VAT bank account, and engaging help from a bookkeeping professional. How it works The £90K turnover (sales) threshold is rolling. So if after 12 months of trading, you were at £60K turnover, it doesn't fall back to zero at the start of the next year. The threshold could be exceeded early into year 2. Some VAT info is here, including the registration link. (www.gov.uk website) https://www.gov.uk/register-for-vat It works by adding 20% VAT to your sales invoices once registered. This must be displayed clearly, along with quoting the VAT number. For example your fee is £100 + £20 VAT = £120 The £20 VAT belongs to HMRC. This needs to be paid over to them, however, if you have already paid VAT to your suppliers, this is deducted from the VAT bill. Some businesses absorb the VAT and don't increase their prices, and pay over £16.67, however, unless you have a large amount of VAT-registered suppliers to reclaim VAT from, this could end up being a big cost to your business. VAT registration could be considered a sign of success. You might be surprised that your customers are happy to pay your price increase because they can reclaim it off their VAT return. Tidy bookkeeping, cash flow forecasting, and a VAT bank account Business owners often make the mistake of using all money received in the bank. When it is time to pay the VAT bill, it feels like a huge business expense - often not planned for or saved. By putting the 20% VAT into a separate VAT account immediately on receipt, it will be much easier to manage. VAT registration can be a bonus if managed well. The 20% extra sales tucked away in a separate bank account belong to HMRC. When you claim your VAT on purchases, you rarely pay over the full amount - the remainder is yours. Now comes the tricky part. This is remembering to put the money aside, and operating on the net sales and net purchases. Accounting software will help with this, along with good cash flow management - forecasting what (net) sales are coming in, what needs to be paid, and when. Predicting how much money will be in the bank, for example, in 4 months, will help with decision-making. How can a bookkeeping professional help you? As well as registering you for VAT, they can deal with the first return, which is often a VAT refund (reclaiming VAT on assets going back 4 years, and services for 6 months). They are experienced with VAT codes and what can/cannot be claimed. They are also qualified to keep you compliant with Making Tax Digital and let you know when VAT returns are due. We are ready to support your business with bookkeeping and cash flow management, too. There are different VAT schemes. It depends on the individual business and its circumstances, examples are: the standard scheme, flat rate scheme, VAT cash accounting, and annual scheme. Is your business growing and £90K turnover getting closer? We would be more than happy to support you with registration and returns. Send us an email or book a chat today! Lorna
