What did Santa bring you last Christmas?

SME and microbusiness owners will easily say: a whole lot of new taxation information and changes.

For businesses of all sizes, particularly microbusinesses, staying abreast of regulatory changes is essential to maintain compliance and secure financial efficiency.

Understanding the evolving tax laws and implementing effective strategies can help SMEs position themselves for stability and growth in a challenging economic climate.

Let’s see them together.

Spoiler Alert: This is for UK and US Markets but we are currently looking into EU, Australia and Vietnam changes for those of you who are interested in exploring international options and opportunities!

United Kingdom: Preparing for Changes

1. Employment Rights Bill (ERB): Expected to become law this year, the ERB includes:
   • Gender Equality Action Plans: Employers must publish detailed plans to address workplace gender gaps.
   • Expanded Flexible Working Rights: Strengthened protections for employees seeking flexible arrangements or on family leave.
2. OECD Pillar Two Rules: Multinational microbusinesses may face new tax obligations as the UK aligns with global corporate tax reform.

How can we sum this up? In the UK, the much-anticipated Employment Rights Bill (ERB) is set to come into effect this year. This new legislation will introduce obligations for employers to publish action plans on gender equality while expanding flexible working rights and strengthening protections for employees on family leave.

What does this mean for UK SMEs? This Bill will require careful planning to remain compliant while fostering an inclusive and adaptable workplace.

Additionally, the UK government’s adoption of OECD Pillar Two rules will impact multinational businesses, including SMEs with international operations. These global corporate tax reforms aim to create a level playing field but will require meticulous navigation by smaller enterprises looking to expand across borders.

Definition: Micro-multinational small and medium-sized enterprises (SMEs) leverage technology to expand internationally early in their lifecycle.

United States: Compliance and Opportunities

Across the Atlantic, SMEs in the United States will need to adhere to quarterly estimated tax payment schedules to avoid penalties. The US also continues to offer lucrative tax credits such as the Work Opportunity Tax Credit (WOTC) and the Research and Development (R&D) Tax Credit, both of which provide valuable opportunities for innovation and workforce expansion.

Further, depreciation allowances like the Section 179 deduction or bonus depreciation offer SMEs the chance to offset investments in new equipment or software.

Let’s sum up what SMEs in the US must be aware of:

1. Quarterly Tax Payments: Small businesses must ensure timely estimated tax payments to avoid penalties.
2. Tax Credits to Leverage:
   • Work Opportunity Tax Credit (WOTC): For hiring individuals from targeted groups.
   • Research and Development (R&D) Credit: For innovation-focused SMEs.
3. Depreciation Benefits: Use Section 179 deductions or bonus depreciation to claim full or partial write-offs for new equipment and software purchases.
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US-UK Business Collaborations: What Changes in 2025

In 2024, the economic collaboration between the UK and the US remained robust, with total trade in goods and services amounting to approximately £304.3 billion.

While specific figures for UK SMEs’ exports to the US in 2024 are not readily available, overall UK exports to the US totalled £188.2 billion in the four quarters leading up to Q2 2024. This represented a slight decrease of 0.4% compared to the previous year. Of these exports, £59.0 billion were goods, and £129.2 billion were services.

You can read all about it in this very nicely crafted PDF generated by the UK government:

However, UK SME exporters faced challenges during this period. Reports indicate that more than half of SME exporters experienced stagnant overseas sales, with 53% reporting no change and 23% noting a decrease in Q1 2024. Only 24% saw an increase in their overseas sales during the same period.

The situation has been just as lucrative for the US, with trade between the two nations amounting to about $296 billion per year. Additionally, there is approximately $1.7 trillion invested in each other’s economies, underscoring the depth of their economic ties.

Taxation and Collaboration: What to Expect in 2025

Understanding the evolving dynamics of taxation and cross-border collaboration is essential for SMEs, especially as the UK navigates a post-Brexit environment and ongoing geopolitical challenges in 2025.

In response to these complexities, the UK and US governments have initiated dialogues aimed at reducing trade barriers and improving market access. These efforts are designed to streamline international operations for SMEs, making global expansion more feasible even within strict regulatory frameworks.

Recent policy updates, such as extended automatic renewal periods for H-1B and L-1 visa holders’ spouses, further support SMEs by minimising business disruptions and enabling smoother cross-border operations.

In addition to regulatory adjustments, targeted incentives like tax credits for expansion activities offer SMEs and micro businesses critical financial relief, allowing them to explore new markets with reduced cost burdens.

With these opportunities, business consultants play a pivotal role in helping SMEs assess their options, optimise their strategies, and manage risks effectively.

By staying informed and leveraging expert guidance, SMEs can turn the challenges of 2025 into avenues for growth and innovation.

Book a Consultation with NorthStar Consulting UK

Navigating these changes can be daunting, but you don’t have to do it alone.

At NorthStar Consulting UK, we specialise in supporting SMEs and microbusinesses through tailored strategies that address both immediate challenges and long-term objectives. Whether you are looking at internationalisation, commercialisation or simply growing your business in 2025, we are here for you.

With our expertise spanning the UK, US, and beyond, we are here to help your business navigate 2025 and thrive in uncertain times.

Contact us today to schedule a free consultation and discover how NorthStar Consulting Ucan help your business unlock its full potential.