2025 - Side Hustles, Tax, and More AI for Business

There is something special about the start of a new year. We look ahead and think about what might change. Businesses need to be agile, adaptable, and relevant to keep customers beating a path to the door. What could 2025 hold for your business?

#1 Side Hustle

There are suggestions that HMRC may start a crackdown on side hustles. Nearly half of the UK population has at least one side hustle. Many earn about £200 a week from it. This news is not welcome for them.

Side hustle - or having a second-job as Gen Xers would call it - is nothing new. The economy is struggling after the Covid lockdowns.

Interest rates and inflation are also changing. For many people, starting a side hustle became necessary. For others, it is an opportunity to monetize their hobby.

It seems this trend will not slow down soon. This could lead to a healthy growth of new businesses ahead. For existing small businesses, it may also mean that some of these side hustles are useful to them too.

HMRC wants to make sure everyone pays their fair share. They have proposed new rules for people with a second income. This includes selling items on second-hand sites like eBay and Vinted. 

We’ll be covering more on side hustles and tax in the coming weeks. In the meantime, check the current rules and how they apply to you.

#2 The year of AI for small business

Artificial Intelligence is everywhere or so it feels. For small businesses, it can bring efficiencies along with a wealth of information and processes.

AI can help businesses understand data better. It can also improve personalization, as discussed in customer service below. Additionally, AI can increase automation and reduce costs. The possibility of improved cyber-security also exists. 

At Prontus, we work closely with the IAB. Our goal is to make sure AI improves all parts of our bookkeeping and payroll services for clients.

#3 Sustainability will grow in importance

From desirable to essential, running a sustainable business is notching up a gear.

Sustainability of a product or service is now seen as a "very important" factor when buying. This is a big increase from "important." Customers are also critical of companies that do not meet these expectations.

In the UK, sustainability is now a requirement. Governments are urging businesses to do their part.

There have been small but maintainable changes in Wales during 2024. A new law requires businesses in Wales to recycle. They must separate paper, card, metal, plastics, and other materials from general waste.

There are UK-wide initiatives as well. Instead of just 'box ticking', companies that operate more sustainably may find tax relief schemes. 

#4 Making Tax Digital

Since June 2020, the UK Government has stated that tax is going digital. This change will affect all businesses, both big and small, including sole traders and landlords.

From 2026, some sole traders and landlords will need to keep digital records, and use accounting software that works with MTD. Returns will need submitting every quarter (similar to quarterly VAT returns) and one annual return.

It may seem a long way off but essentially, 2025 is the year that sole traders and landlords need to get to grips with this new way of working.

Find out more on the current picture of Making Tax Digital for Income Tax in our recent blog post.

#5 Premium standard customer service

The impact of AI on business is growing and when it comes to customer service, there is a growing expectation from customers of it being premium standard - and that means personalised service.

Live chat with a bot can only give your customers so much information. People still want the human touch when it comes to being in contact with a brand, whether that’s to get a query answered or to make a complaint.

#6 The Creative Economy will stay strong

YouTube, TikTok, Instagram and Facebook have long been popular and it seems that the Creative Economy is only going to get stronger and stronger. Predictions are that by 2027, the global creator economy could double to more than $500bn.

Many people have already made the successful leap from their full time jobs to online entrepreneur and although there is still disdain over the influencing as a career choice, for business, working in collaboration could be a strong strand to social media strategy.

Choose and act wisely, however as in today’s ‘cancel culture’ one mistake could bring unwanted attention to your brand.

#7 Rising costs & price rises

Every business will face rising operational costs one being the change to business rates. 

The current 75% discount business rate will end in April 2025. Replacing it will be a permanent 40% discount but capped at £110,000 per business.

With this in mind, the first quarter of 2025 is the time to take a look at your financial plans, adjusting your budget accordingly.

This may mean price increases for your customers. Always a difficult subject to communicate to your customer base, it is important to have this conversation about price rises and to do so properly. 

A promising year ahead

2025 will hold suprises, challenges and opportunities for business. An agile business, with an overview of its financial health at all times, there is no reason why this coming year won’t be a great one!

As with all content on our site, facts and figures were checked on the date of writing and correct at the time of publication. None of the above consitute advice on what you should or should do. For tax advice, consult your accountnat or tax adviser. For more information on digital bookkeeping, payroll or HR, email hello@prontus.co.uk