Smart ways to save on business costs

Check your benefits entitlement

A lot of self-employed people miss out on benefits they could be getting! Take just a few minutes to use our benefits calculator and see if you qualify for support like Universal Credit or Tax Credits. It could make a real difference to your income.

Have you heard of the Minimum Income Floor (MIF)?

MIF is a rule that affects self-employed people claiming benefits like Universal Credit. It means that if you’re self-employed but earn less than a certain amount, the government will assume you’re earning more – based on the National Minimum Wage – and calculate your benefits as if you’re earning that higher amount.

This means that even if your earnings are low, they’ll still estimate a certain level of income for you, which could affect how much financial help you can get.  

Here’s what you can do if you think this may affect you:

• Track your income – Keep a clear record of your earnings. If you’re earning less than the MIF, make sure you document everything to show your actual income when needed
• Check your eligibility – You may still qualify for benefits or support if your income fluctuates or if you’re in a particular situation, so it’s worth using our online benefits calculator to check what you could receive
• Plan for low-income months – If your income can vary, try to budget and save when times are better, so you’re better prepared when your earnings dip below the MIF

Government grants and support

If you’re running a small business, there are various grants, start-up loans and funding options available to help you grow. The government provides a range of schemes designed to support entrepreneurs and small business owners, whether you’re just starting out or expanding. You can check the government’s website to find out more about the financial assistance it can provide to small businesses.

Marketing on a budget

Use free tools like social media, email newsletters and online directories to promote your business without big advertising costs.

Separate business and personal finances

Make life easier by opening a business account if you don’t have one already. Keeping your business and personal money separate makes it easier to track your spending, claim tax deductions and keep things clear.

Plan ahead for your next tax bill

Don’t wait for the tax deadline. Set up a plan to pay your tax in smaller amounts throughout the year. Use the government’s online tool to get an estimate on your next Self-Assessment tax bill.  

Regularly review and negotiate contracts

Regularly review contracts to make sure you’re getting the best deal. Many suppliers offer discounts for bulk orders, early payments or long-term agreements. If you’ve been a loyal customer, don’t be afraid to negotiate for better terms or shop around for more competitive rates.

Optimise your office space

If you’re renting, consider moving to a cheaper space or working remotely to save money on rent and utilities.

Use cost-saving technology

Cloud-based tools, automation software and more energy-efficient equipment can all help you reduce your expenses while boosting efficiency.

Consider flexible staffing options

Hire freelancers or part-time workers when needed, offer remote work to save on office space and consider upskilling existing employees so staff can cover multiple roles.

Share your equipment with other businesses

Consider sharing resources with nearby businesses to cut costs. This could include office equipment, leasing out machinery and tools and sharing office spaces.

Don’t automatically renew services

Before renewing insurance, subscriptions or service contracts, take the time to compare prices. Ask for discounts and cancel anything you no longer need.

Make smarter purchasing decisions

Opt for second-hand equipment and switch to digital documents, e-signatures and cloud storage to save on paper and ink.

Make sure you claim allowable business expenses

If you’re self-employed, there are lots of expenses you can claim back, including:

• Office costs (stationery, rent, insurance and energy bills)
• Travel costs (fuel, parking, business trips and vehicle servicing)
• Work-related clothing (uniforms, protective gear or specialist outfits)
• Staff wages, pensions and training courses
• Accountancy and legal fees

Check the government’s website for a full list of what you can claim as business expenses.

Tips:

• If you work from home, you might be able to claim a portion of your home costs like heating, electricity and internet use.
• If you use traditional accounting, you can claim tax relief on money you were expecting to receive but never got – as long as you’re certain they won’t be recovered from your customer in the future.
• Keep records of all your business expenses as proof of your costs.

Manage cash flow and late payments

Late payments can cause serious problems for businesses. Protect yourself by setting clear payment terms, asking for deposits or upfront payments, invoicing in stages for larger jobs and working off a monthly budget that takes into account your quieter months.