A major staffing shakeup is coming to hospitality businesses, and operators are still in the dark about what it actually will mean for them. 

The government’s consultation on guaranteed hours – part of the wider Employment Rights Act 2025 – closed on the 25th of August. In a nutshell, it sets out to give workers on zero-hour and low-hour contracts the right to be given a contract reflecting how many hours they work. 

While these reforms aren’t banning zero-hours entirely, they could still pose a real headache for hospitality businesses, which lean on flexible staffing more than almost any other sector. 

As we wait on ministers to publish their response, we asked hospitality operators, employment law experts, and trade bodies what changes are actually on the table and how the sector is likely to react to the reforms.

 Guaranteed hours overhaul: what’s actually changing?

Workers on zero-hours or low-hours contracts would get the right to be offered guaranteed hours reflecting what they actually work, the right to reasonable notice ahead of shifts, and the right to compensation when a shift is canceled or moved last minute. 

Speaking to Startups.co.uk, employment lawyer Patrick Macken of Richard Nelson LLP said that while the mechanics of the changes are still being thrashed out, the government wants to set the reference period at 12 weeks – in line with how average pay is already calculated under existing employment law – with eligibility criteria likely to land somewhere between 8 and 20 hours per week.

Crucially, this isn’t the death of zero-hours contracts. Workers can still choose to stay on one if it suits them. But for hospitality, where trade can swing from dead quiet to slammed in a single shift, even a “soft” version of guaranteed hours would be a drastic change. 

Yet, with the consultation closing on the 25th of August and changes expected to come into force sometime in 2027, businesses do have a little breathing room to prepare before the rules bite.

Experts back the principle, but say they won’t work for hospitality

After speaking to trade bodies and industry experts across hospitality, one thing was clear: no one is defending exploitative zero-hours practices.  

Rita Kastrati, co-founder and CEO of recruitment and gig-platform Pioneering People, tells us, “I support the principle behind the proposals. Nobody should remain on a zero-hours contract while consistently working what is effectively a regular job.” 

Steve Hesketh, CEO of the hospitality consultancy and management firm Savvy Collective, agrees: “Nobody in hospitality is against fair treatment for staff, and most of us moved away from harsh zero-hours practices years ago anyway.”   

However, when it comes down to the details, operators agree it’s a design problem, not a values problem. The issue isn’t whether staff deserve security – it’s whether a 12-week window can capture an industry that barely runs to a predictable calendar at all. 

“A 12-week reference period is workable in theory, but hospitality doesn’t run in neat 12-week blocks. We have a quiet January, a manic Christmas, a beer garden that only fills when the sun’s out. Average those hours and you either lock in shifts or set the threshold so low it changes nothing in practice,” Hesketh continued.

Hospitality is highly seasonal, so a short reference period could mistake a temporary peak for a permanent staffing requirement. This may make businesses more cautious about offering extra shifts, unintentionally reducing opportunities for workers.

Rita Kastrati Founder of Pioneering People

Greater flexibility is needed, or sasonal roles pay the price

The solution? John-Paul Mcaughey, the co-founder of Schooners bar in Birmingham, believes the answer lies in a longer reference period.

“Any reference period would need to be over 52 weeks to adjust for seasonality. I’m not sure how they gain the right to give people guaranteed hours, as everything in hospitality is done on an individual, case-by-case basis.”

Trade bodies representing the sector echo the same concern at scale. A spokesperson from the Night Time Industries Association (NTIA), a trade body that supports the UK’s night-time economy, told Startups: “Our concern is ensuring that the legislation distinguishes between exploitative employment practices and the legitimate flexibility that is fundamental to hospitality, nightlife and events.”

Whatever time period ministers settle on, the message from operators is consistent. Applying a nine-to-five framework to hospitality just won’t work, and it risks punishing the seasonal, flexible roles the sector depends on to survive.

What guaranteed hours could actually cost hospitality, and the wider economy

For hospitality owners, it all comes down to one question: what will this actually cost me?

Graeme Donnelly, CEO and founder of 1st Formations, points to the government’s own figures: “The government’s latest analysis suggests the wider reforms could cost businesses between £350 million and £2.9 billion a year, depending on how the final rules are implemented. Compensation for shifts cancelled, moved, or cut short at short notice could account for up to £1.2 billion of this total.” 

“There is also a wider concern that reducing labour market flexibility could have unintended consequences for employment,” he continues, pointing to examples in Spain and Italy where similar labour market restrictions led to higher rates of youth unemployment. 

Startup columnist and founder of Planet of the Grapes, Matt Harris, warns smaller businesses will be hit twice as hard. “When part-time or seasonal staff take sick leave, you’re paying them statutory pay while simultaneously paying a replacement worker to cover the shift.”

“Small venues simply don’t have the cash reserves to absorb that kind of double-dipping compliance overhead without cutting back elsewhere,” he continues. 

However, Savvy Collective’s Pete Hesketh argues that the real burden is the time, not money. “The bigger cost, though, is admin,” he tells us.

Tracking actual hours worked, calculating fair offers, giving proper shift notice, and handling cancellation payments all land on an owner who’s usually also on the floor most nights pulling pints or expediting food.

Pete Hesketh CEO of Savvy Collective

Taken together, these voices from across the sector suggest the real question isn’t whether the new rules will cost hospitality, but how operators plan to absorb it. 

What can hospitality businesses do to prepare for the changes?

With regulations still to be published, operators can’t yet make final decisions – but there’s plenty they can do in the meantime.

Donnelly’s advice is to start with the numbers: review rotas, payroll records and timesheets now to understand who might already qualify for guaranteed hours under the proposed thresholds, and invest in proper time-tracking software if you don’t already have it. 

He also suggests simply asking staff what they want, since not everyone will welcome a guaranteed-hours offer. Some value the flexibility of zero hours too much to give it up. 

Rebecca Stevenson, co-founder of East London cafe Signorelli, has more of a structural suggestion: rather than guaranteeing a precise weekly figure, she’d like to see businesses able to offer contractual hour “bands” – say 16–24, 30–40 and 40-plus hours – giving staff visibility over likely earnings while preserving room to flex.

For Matt Harris, preparation looks more like damage control. He tells us he’ll have no choice but to run a leaner core team, relying more on cross-training staff to cover multiple roles rather than hiring extra hands. “When the government forces fixed costs on a fluctuating industry,” he says, “the only way to adapt is to shrink your risk.” 

With the final rules still months away, the details remain far from settled. But one thing is already clear: the operators getting ahead of it now are the ones least likely to be caught out when they land.

2026 has created the perfect storm for business owners. As margins continue to be squeezed by National Living Wage costs, soaring energy prices, and rising business rates, staying on top of expenses is no longer just housekeeping for business owners; it’s a matter of sink or swim. 

The UK could see up to 25,000 insolvencies this year, with small businesses in retail, hospitality, and construction facing the harshest pressure. But it’s not all doom and gloom; small businesses are nothing but resourceful, and there are plenty of ways to cut costs without cutting corners. 

To help you find yours, we’ve spoken to business owners, accountants, and CFOs facing these pressures directly to learn which money-saving strategies actually work, and how they’ve put them into practice day-to-day.

1. Calculate your annual spend before negotiating with suppliers

Oftentimes, cutting costs starts with rethinking your supplier relationships. But before you pick up the phone and turn on the charm, you need to do your homework first.

Jon Maloney, co-founder of Century Business Finance, recommends crunching the numbers beforehand and using them as leverage. “Before approaching a supplier, a business should calculate exactly how much they’ve spent with the supplier over the past 12-months,” Maloney tells us. 

“This total cost will give the business a tangible figure to negotiate with, such as better payment terms, free or reduced delivery, fixed prices for an agreed period, and volume rebates.”

Regularly review the suppliers and services the business already pays for, rather than automatically renewing with the same providers each year. New solutions are entering the market all the time, and a provider that suited the business a few years ago may no longer offer the best value. We recently reviewed our email service and switched providers.

Simon George Founder of Business Buzz

2. Negotiate with your biggest supplier in person

According to others, nailing your supplier deal doesn’t just depend on what you say, but how you choose to say it. 

James Demetriades, founder of the jewellery retailer Undeniable, swears by “flying to meet your key supplier in person, rather than negotiating over email”, especially if you’re discussing bulk orders and long-term contracts.

It’s the biggest single cost saving he’s ever pulled off. Demetriades flew to China to negotiate a bulk stock order for a hair care brand he mentors. The result was a cost of goods stock from $63 to $38.50 a unit, resulting in a $24,500 saving on the first order alone – a return that dwarfed the cost of his £720 flight.

3. Check if you’re in the right VAT Flat Rate Scheme category

On the Flat Rate Scheme, you pay a fixed percentage of turnover to HMRC instead of net VAT. As a result, you keep the difference between what you charge customers and what you hand over – savings that can add up every quarter.

Graeme Donnelly, founder and CEO of 1st Formations, points out that it’s easy to end up in the wrong category and never notice: “The biggest savings rarely come from dramatic cuts. They come from decisions made once and never looked at again”, such as the VAT scheme chosen at registration.

To avoid being lumped into the wrong category and paying more unnecessarily, Donnelly advises checking your category against HMRC’s Flat Rate list annually, not just at registration. He also recommends getting an accountant to confirm if it beats standard VAT accounting for your business.

4. Voluntarily register for VAT even below the £90,000 threshold

While adding more admin to your pile may seem counterintuitive, for businesses below the VAT threshold, registering could unlock more savings than you’d expect, especially if you have lots of taxable supplies.

Neil Ormesher, CEO of Accounts and Legal, explains that small businesses turning over less than the £90,000 VAT threshold can “voluntarily register for VAT to reclaim money on expenses like office supplies, equipment and travel.”

The backdate period opens up even more savings, too: “the backdate window is also quite generous, meaning you can reclaim VAT on goods purchased up to four years and services up to six months prior to registration.” 

According to Ormesher, “start ups and small businesses can realistically save anywhere from £1,000 to £5,000 per year through this strategy alone” – a meaningful cushion for businesses looking to protect their margins.

5. Move idle cash into a dedicated savings account

We’ve all heard the advice ‘make your cash work for you’, but are you applying it where it matters most?

Rebecca Alford, CFO of business credit card and financial platform Capital on Tap, puts it plainly: “Many owners may leave all their operational money sitting in a basic current account earning zero interest. That is free money left on the table.”

Her fix is simple. Move excess cash into a dedicated business savings account so it can build up passively, rather than sitting idle. 

“Moving excess cash into a dedicated business savings account lets your reserves build up passively,” Rebecca tells us. “Even small, regular deposits add up over time, giving you a safety cushion for emergency bills or sudden price spikes from suppliers.”

6. Swap paid market-research tools for free library access

The truth is, you’re probably spending more than you need to on market research.

Chris Sees, CEO of Hoxton Mix, points to a resource most founders overlook entirely: “British Library Business & IP Centre – free Mintel, Statista, IBISWorld, Euromonitor. Tens of thousands of pounds of market research, free, at 70+ UK libraries.”

And he’s speaking from personal experience. “I used these all the time when I was starting out, and the library doubles as a co-working space.” Chris tells us. “The British Library is an amazing place to work. You don’t need to pay for an office.”

7. Audit your software subscriptions each quarter

Software creep is one of the sneaky ways small businesses bleed money. Seats go unused, renewals get paid, and costs stack up without anyone noticing. 

Connor Gillivan, SEO and growth expert at Trio SEO, recommends a “zero-based subscription audit,” where every recurring tool has to earn its place from scratch each quarter rather than simply renewing by default. “The easiest money to save is the money leaving your account every month without a named owner,” he tells us.

He recommends exporting 90 days of card transactions into a spreadsheet, tagging every recurring charge by owner, use case, and monthly cost, before asking a blunt question for each tool: “Did this help us win revenue, save time, or serve a client in the past 30 days?”. If the answer is no, it’s time to cancel.

8. Streamline your marketing channels

Marketing your business is non-negotiable, but Nishi Patel, founder of the accounting platform N-accounting, argues there are major savings opportunities in stripping back your overall marketing spend and focusing only on channels where you can clearly measure the results.

We’re now saving approximately £40,000 a year by stepping away from generic brand-building and PR activity and focusing our budget on client referrals, PPC and SEO. We’ve cut back significantly on press releases, social media posting, events and networking.

Nishi Patel Founder of N-accounting

Patel says this approach was partly inspired by the bestseller Profit First by Mike Michalowicz, which encourages business owners to deliberately reduce the money available in order to force leaner, more selective decision-making. 

Before cutting your marketing budget this way, though, it’s worth first identifying where your clients are actually coming from, so you know which channels are safe to pull back on.

Autonomy over your schedule. Working from your favourite independent coffee shop. No overbearing boss. Freelancing has a bounty of benefits – but calculating your rate definitely isn’t one of them.

With freelancers facing a £208k pension shortfall compared to full-time employees, undercharging can leave you scraping by with nothing left to save, while charging too high risks pricing yourself out of work entirely as competition grows increasingly steep.

There’s no one-size-fits-all rate for a market this diverse. Yet, to help you avoid being short-changed or pricing yourself out of the game, we asked five experienced freelancers – spanning social strategy, VFX, and senior government – how they calculate their rates and for tips on how to raise them without scaring off good clients.

Start with a basic formula, then adjust it to fit you

Before landing on a number, it’s worth running your costs through a freelance rate calculator to get a baseline figure. They offer a quick way to reality-check your pricing, using a standard formula of target income plus business expenses, divided by billable hours. 

From this jump-off point, how freelancers refine this baseline varies wildly. 

Amy Dawson, co-founder of PR and copywriting agency Gatekeeper Communications, considers a combination of market rates, business costs, and personal income goals to calculate her day rate. Notably, her calculation doesn’t just factor in her time and expertise but also overheads like software subscriptions, equipment, and unpaid administrative work. 

“I also make sure my day rate aligns with my hourly rate so that I can price shorter projects fairly and consistently,” she adds.

Will Jennett, freelance VFX artist, keeps it simple. He loosely bases his rate on industry trends, but in order to get the best return possible, he continually tries to push his prices higher each January, until he receives pushback from people. 

For Katie Barnett, freelance social media strategist and content creator, it’s more instinct-led. Her pricing strategy is based on a combination of how valuable the job or project is to her, and a read on what sort of budget the client has. “Generally, I am flexible, but I need to feel as though it’s worthwhile for me.”, she tells us.

Know when it’s time to raise your rates

For many freelancers, knowing when to pull the trigger and raise their prices can feel like an impossible judgement call. However, instead of treating it like a guessing game, Amy Dawson suggests following the data instead. 

“One of the clearest signs it’s time to increase your rates is when your profit margins start to shrink, even though your workload remains the same.” If costs are rising and your prices aren’t, she warns, “it will significantly affect your end-of-year profitability.” 

Chris Wilson-Cambata, founder of freelance platform Mint Gecko, points to a similar set of telltale signs. “Being consistently fully booked, receiving very little resistance to proposals, and taking on increasingly complex or valuable work are all strong indicators.” 

He also recommends building in a routine check-in regardless of how busy you are – “Rates should also be reviewed at least annually to reflect rising costs and growing expertise.”

For Will Jennett, the test is more of a two-way dance. “If your clients are saying ‘yep, no worries’ to your rate, you should try charging the next one more until they push back.”

In his experience, clients rarely pay you more voluntarily. “It’s very rare they’ll push your rate higher to match their budget if there (is) room at the top”. So, instead of playing a waiting game, Jennett believes the responsibility sits with the freelancer to test the ceiling. 

Ultimately, whether it’s profit margins or a client who never pushes back, knowing when to raise your rates will depend on your industry, experience, and circumstances.

Yet, every freelancer we spoke to points to the same conclusion – the signals are usually there long before the confidence is.

How to actually raise your rates without losing clients

For many freelancers, the fear isn’t just asking for more money; it’s the awkward conversation that comes with it. 

Amy Dawson believes this anxiety is often misplaced. “It comes down to building strong client relationships and consistently demonstrating the value of my work,” she says. “When clients can clearly see the business benefits that you bring… a rate increase is much easier to justify.”

For Chris Wilson-Cambata, this process is also about being non-apologetic and letting clients know ahead of time. “The key is to provide reasonable notice and communicate the change clearly and confidently,” he says, adding that freelancers shouldn’t be shy about explaining why: “the additional experience, reliability, expertise or value clients now receive.”

Flexibility also matters to Katie Barnett, who prefers adjusting the scope of work instead of applying a blanket rate increase to all clients. For clients she particularly wants to keep, she says, “I have on some occasions accepted a slightly lower rate but with a reduced scope of work.”

And sometimes, a client will simply leave, which Wilson-Cambata argues isn’t necessarily a failure. “Retaining every client should not be the objective if doing so makes the freelancer’s business financially or personally unsustainable.”

The government has reworked its £10 million Hospitality Grant Scheme to give more independent pubs, restaurants, and cafes a shot in the arm, with applications opening at the end of September. 

Initially, the scheme was targeted at pubs, but it’s now been broadened to also target people starting new hospitality ventures, as well as those bringing vacant venues back into use. £3m of the total sum, however, is still earmarked for Pub is the Hub – a non-profit helping pubs in rural areas diversify their activities.

The announcement follows the news that pubs, clubs and live music venues are set to receive a 20% slash to business rates from April, and will likely provide welcome relief to a sector under pressure, with research finding that 23% of pubs and restaurants are operating at a loss.

New government scheme will give hospitality owners a leg up

If you’re a new or aspiring hospitality business owner, you already know the path to opening a venue in 2026 is paved with risks. Hospitality is the second worst-performing sector for insolvencies after construction, accounting for 15% of all business failures in England and Wales. 

The government’s new £10 million Hospitality Grant Scheme aims to close the gap for local pub, restaurant, and cafe owners by lowering the barrier to entry for people trying to get a venue off the ground. 

Specifically, it’s designed to fund projects that help new hospitality venues launch, and bring vacant premises back to use, rather than leaving high streets with empty units.

Alongside launch capital, the scheme also funds training programmes to help new business owners develop the skills, confidence, and work ethic to nurture their venture. 

For example, funding from the scheme’s pilot has already been used by the non-profit Right Course to transform prison restaurants and kitchens into hospitality training facilities, helping to provide inmates with valuable hospitality experience. 

This practical focus is already earning the scheme support from the industry, with Jane O’Riordan, Co-Chair of the Hospitality Sector Council, noting that “the flexible funding will help support innovative projects that boost productivity and sustainability, create opportunities for young people and those furthest from the labour market.”

With the sector in its current state, the £10 million pot won’t fix cost pressures overnight. However, for the entrepreneurs, it’s likely to be a huge helping hand at a time they need it most. 

Applications for the Hospitality Grant Scheme won’t open until the end of September, but guidance is already live on GOV.UK – meaning business owners can start preparing now rather than waiting until the window opens.

Could the Pub is The Hub’s £3m windfall be a lifeline for village locals?

While this government scheme is geared towards new entrants, existing pub owners haven’t been left out of the conversation completely. 

£3 million out of the £10 million pot has been ring-fenced for Pub is The Hub – an independent non-profit that’s spent the past 25 years helping pubs in rural and deprived areas diversify beyond just serving drinks. 

According to the government’s press release, this could include anything from adding village stores, community cafes, and play areas to pubs, enabling establishments to act as vital local hubs for their community. 

Admittedly, for pubs it’s a survival strategy as much as a growth one. With almost two pub closures recorded every day in 2026, failing to diversify could mean last orders for good for venues that have anchored their communities for decades. 

The Hospitality Grant Scheme isn’t the only relief measure on the table for pubs, though. The announcement follows news that pubs, clubs, and live music venues will receive a 20% cut to their business rates bills from April – a change expected to save the typical pub £1,000 per year.

While these are clear steps in the right direction, businesses are still playing a waiting game until these schemes become available. But fortunately, for struggling hospitality businesses that can’t afford to sit tight until the end of the month, there are other schemes available right now.

If you’re drowning in forms, help may be coming. The government plans to cut down the amount of red tape businesses face, as part of a major corporate reporting overhaul intending to free up time and save businesses over £450 million per year.

According to GOV.UK data, some companies’ annual reports have ballooned to 98,000 words – that’s even longer than J.R.R. Tolkien’s The Hobbit. In an effort to scale back “pen-pushing paperwork”, the government’s proposals soften reporting rules, digitise key compliance steps, and exempt more businesses from audits. 

A consultation is now open for feedback until the 30th of November, giving business owners a chance to help shape the conversation. Yet, until they come into place, it’s worth knowing what you can do to ease your reporting burden today.

Government moves to axe outdated reporting rules

The proposals cover a handful of concrete changes. According to a recent GOV.UK press release, small and medium-sized businesses would get a lighter reporting load overall, and some medium-sized companies would be exempt from audits – a privilege they currently have to pay for.  

Two specific paperwork requirements are earmarked to be scrapped entirely: the directors’ report and the strategic report for mid-sized companies.

On top of that, financial reporting, corporate governance reporting, and remuneration reporting would all be streamlined and made “more proportionate” to a company’s size, rather than applying the same rulebook to a local coffee shop and a FTSE 100 giant. 

There’s also a digital push. Shareholder communications would be electronic by default, and the government is actively exploring how AI can be used to shrink paper piles and drive up efficiencies. 

Crucially, beyond just saving time, the reforms intend to cut real costs. The government estimates the reporting overhaul could save businesses £450 million a year in reporting costs, with the Department for Business, Innovation, Science and Trade pointing out it’s “nonsensical” for small businesses like cafes, hotels and furniture makers to spend thousands of pounds on reports.

As Business Secretary Jonathan Reynolds puts it: the changes will “cut the cost of doing business, giving breathing room to bosses across the country, and free them up to focus on what they do best, creating jobs and growth.”

The UK’s costly reporting problem

Administrative burdens for UK businesses are currently stark. According to research from the Quoted Companies Alliance (QCA), the average annual report and achievements have grown to roughly 98,000 words – marking a 31% increase in just five years.

For FTSE 100 firms, this average swells to 152,000 words due to heavier disclosure requirements around ESG reporting and executive pay that scale with a company’s size.

Yet, it’s small businesses that feel this most acutely. Larger companies with dedicated finance and legal teams can absorb these costs with greater ease, while small chains of cafes, hotels, and independent manufacturers don’t have the same buffer.

This is especially the case for businesses already operating on tight margins and grappling with escalating business rates and utility bills. 

With the government just opening its 12-week consultation, businesses have until the 30th of November to have their say on how the rules will take effect.

However, with no set timeline in place for implementation, relief is unlikely to arrive quickly – so it’s worth knowing what steps you can take to lighten your load today.

Tipping rules could be about to get more complicated. The government has recently re-released its draft revised Code of Practice around tipping, after unexpectedly withdrawing it in July – just weeks after first publishing it, and only months before the new rules were due to take effect in October.

With the new rules expected to come into place by the end of the year, now is a good time to understand how the potential changes could affect the way your business handles gratuity. To save you from wading through the fine print, we’ve asked the experts and summed up five key details that could have the biggest impact.  

The re-released draft is largely unchanged from the one withdrawn in July, but nothing is written in stone. The draft Code is currently in consultation, so if you want to tip the scales, you can send feedback to the Department of Business and Trade any time before September 29.

1. You have to consult your workers before changing your tipping policy

Under the current tipping rules, employers have to allocate tips fairly and keep a written policy. However, there is no formal requirement to involve staff in how that policy is shaped – but that’s about to change.

The draft Code makes consulting workers a mandatory part of the process. As Simon Bocca, Founder and CEO of the cloud-based payroll software platform PayCaptain tells us, businesses will now need a “a written, consulted-on tipping policy”.

Gillian Wright, Co-founder of tronc management software JustTip echoes this point, adding that businesses should “start thinking about how you would run a worker consultation, because that duty is coming, and it is new law, not just guidance.”

2. You need to review and keep records of your tipping policy on a recurring basis

Once the new Code is in place, tipping policies will need to be reviewed periodically. In practice, this means employers will need to revisit their tipping policy at set intervals, keep working in the loop each time, and keep a documented trail of the process. 

The good news is that a lot of this grunt work can be automated. “The parts that feel like a burden,” like “running a worker consultation and keeping a record of it”, “reviewing the policy on schedule”, and “holding tipping records for three years,” are “exactly the kind of admin that technology should take off an owner’s plate,” Wright from JustTip explains.

3. App and QR tipping isn’t automatically exempt

The tipping draft closes the relabeling loophole. This means that however gratuity is collected, whether it be through an automatic service charge, a card tip, or through a QR code at the table, all tips are still subject to the new rules. 

Bocca from PayCaptain stresses this detail, explaining that businesses may need to audit the pay they handle app-based and QR tips, as “allocation rather than payment method determines whether it’s in scope”.

In practice, this may mean going back over existing digital tipping setups to check how the money is split, rather than assuming it’s already compliant with the new rules. 

4. Fixed tip shares for senior staff should be avoided or justified

Small hospitality businesses often run on informal understandings. For example, chefs may always get a cut based on a fixed percentage agreed verbally years ago. 

The draft Code pushes back on this, and broadens who should be considered part of the tipping pool in the first place. Under the potential new rules, back-of-house staff will need to be included in the pool, not just workers who deal with directors face-to-face.

This new detail aims to close off unexamined allocations that can expose businesses to equal pay or indirect discrimination claims, and expects businesses to justify the fairness of their scheme as a whole. 

5. Troncs aren’t a hands-off solution

Similar to collecting tips via automatic service charges or QR codes, a tronc doesn’t automatically take the liability off your plate. 

As Wright from JustTip clarifies: “A lot of owners assume that once tips go into a tronc, the liability goes with them. Under the Act, and now this draft Code, that is only true if the tronc really is independent and well run, with the employer staying involved where necessary, checking in on the arrangement rather than walking away from it entirely.”

This means that instead of assuming the label alone covers you, employers will soon need to look closely at how independent their tronc arrangement really is to ensure they adhere to the rules.

Have thoughts about the new Code? The government wants to hear from you

If you don’t like the sound of the proposed changes, the good news is you don’t have to grin and bear it. The government has opened a consultation on the draft Code, opening the floor for hospitality businesses to voice their opinions until the 29th of September. 

As Ben Thomas, CEO of TiPJAR, tells us, the feedback that is received will “help shape how the Code works in practice, reducing uncertainty, creating a level playing field, and making it easier for operators to run fair and transparent tipping processes with confidence.”

Small venues are being specifically encouraged to take part, as the government tries to ensure the Code works for businesses of every size. So, if you want your voice to be heard, now is the time to act. 

For ten weeks this summer, hospitality and leisure businesses across the UK got a VAT cut from 20% to 5% on children’s meals, as part of a government scheme designed to ease cost pressures on families, and drive footfall during the school holidays.

Now the Great British Summer Savings Scheme has come to an end, the hospitality sector wants to know whether that brief taste of a lower tax rate proves its case for a permanent cut to VAT rates.

The case has been building all summer. Since June, Tom Kerridge’s #VATsTheProblem campaign has been demanding a cut from 20% to 10% – bringing the UK in line with rates seen across Europe.

With businesses facing cost pressures from all sides, we weigh up whether halving VAT is the right move to give hospitality the breathing room it needs.

Summer Savings scheme sharpens appetites for bigger tax breaks

The government’s savings scheme, announced on the 21st of May, was launched to a mixed reception. 

Jacyn Heavens, CEO at Epos Now, described the scheme as a “useful but small release” from the pressures facing the industry. He told us Epos Now’s data showed some businesses, including Haven, passed savings directly on to customers, with Haven returning around £4m to holidaymakers.

While some businesses – and the government – do believe it’s made a positive impact on footfall, for much of the hospitality sector, the VAT cut on kids’ meals didn’t go far enough.

Since June, Kerridge has fronted the #VATsTheProblem campaign, demanding a permanent cut to hospitality VAT from 20% to 10%. Critically, he wants the reduced VAT rate to extend beyond kids meals, applying across the whole sector, year-round. 

Kerridge told This is Money that following the launch of the summer scheme, the government ‘has now recognised that VAT is the lever to pull to drive footfall, support families and back hospitality businesses’.

‘Yes, it was time-limited and narrow in scope, but it was important recognition. Tuesday is the last day of that summer scheme, and the next logical step is a lower rate for the entire hospitality sector,’ he added, pushing the government to broaden the scheme. 

There’s a reason why Kerridge’s petition has been signed by over 350,000 people, and has secured backing from trade bodies like UKHospitality and the British Beer & Pub Association. The UK’s 20% VAT rate is currently the second-highest in Europe, with neighbours like France, Spain and Italy charging just 10%.

The pressure on the hospitality sector is stark too. According to CGA by NIQ data, Britain lost 1,839 licensed venues between March and June 2026 alone, and a recent UK Hospitality survey found that 23% of pubs and restaurants in the UK are now operating at a loss. 

Given the backdrop, it’s easy to see why the summer savings scheme has sparked conversation around a sector-wide cut. Yet, with small hospitality businesses already exempt from paying VAT, would a blanket cut really help the venues that need it the most?

Who really benefits from a hospitality VAT cut?

Not everyone is convinced a blanket VAT cut is the fix that the sector actually needs. The Tax Policy Associates, for instance, point out that businesses with a taxable turnover of under £90,000 – a threshold below which 45% of all UK hospitality businesses sit – do not pay VAT at present anyway. 

In practice, this means that many microbusinesses wouldn’t actually benefit from a VAT cut, but would of course still face things like employer NIC and minimum wage increases, rising energy and food costs and business rates hikes, which have added roughly £3.5bn a year to hospitality’s bills.

Huge corporations like McDonald’s, on the other hand, could receive VAT windfalls of over £400m a year after an across-the-board cut, the thinktank says. 

So, what’s the alternative? Some experts believe that if the government wanted to ease cost pressures on hospitality specifically, replacing business rates with a land value tax to address the burden of property-based taxation, and reversing the employer National Insurance increase would be a good place to start. 

Neither involve a blanket rate change that would disproportionately benefit large chains, and instead, tackles the root of the biggest pressure points for small and independent businesses like pubs, restaurants, and cafes. 

There’s no denying that VAT-registered businesses would benefit from a VAT cut through, so if you’re looking to back the movement for a 10% cut to the tax, we outline how this can be done below.

Many entrepreneurs have turned to remote work in search of a better work-life balance. But as more of them manage their businesses from home in pursuit of that flexibility, for many, it’s having the opposite effect.

A study from Dunster House has found that 58% of home business owners feel their business has taken over their home – with work spilling into living spaces, spare rooms, and even evenings and weekends. 

The good news is that many recognise the problem and are taking steps to solve it, from building dedicated garden offices to creating simple daily habits to keep work and life apart.

Business owners ditch office spaces for greater flexibility

Being your own boss has clear perks. You can manage your own schedule, keep all your profits, and choose where you work, with an increasing number of entrepreneurs choosing to manage their business from home. 

However, while trading in busy co-working spaces for the sanctuary of your own home may seem like a no-brainer, that freedom has a cost. According to new research from Dunster House, 55% of home business owners regularly work evenings and weekends, as boundaries between work and home dissolve. 

The study also found that 48% experienced loneliness or isolation as a result of working from home, with water-cooler chit-chat being traded in for the quiet of an empty house. 

For some, boundaries have broken down entirely. One in three (33%) have had customers turn up to their door unannounced, blurring the line between professional and private life in the most literal sense.

It all points to the same conclusion: working from home may remove the commute, but without clear parameters, it can just as easily remove the “home” from home-working altogether.

As work-life boundaries continue to blur, how are remote workers reclaiming their space?

To address these challenges, many entrepreneurs are heavily investing in dedicated workspaces. Dunster House found that almost two-thirds have already spent money on improving their workspace, with respondents investing an average of £5,170 into creating separate working environments.

For some entrepreneurs, like Carole Baker, this includes building a dedicated studio space. Baker runs her wellness business from a converted stable in Bury St Edmunds, after trading in a commercial centre she founded in 2005. 

Baker’s commute is now a stroll across her garden, and she has grown her offering to include breathwork and retreats. But she’s candid about the risks of blending work and home so closely: “It can take over your life if you let it.”

You don’t have to build a separate workspace to draw a line between work and home, though. Freelance events coordinator Olivia Barton aims to work outside of the house when possible. When she does work from home, she confines herself to the table, avoiding the sofa or bed, and treats 9-5 as a hard boundary.

For freelance journalist Lana O’Sullivan, the ritual comes at the other end of the day. Leaving the house as soon as work finishes, whether for the gym or a walk, to mentally “finish” and step away from screens.

With work always in reach, the pressure for entrepreneurs to be always-on is real. However, if you’re serious about making working from home sustainable in the long run, knowing when to switch off isn’t just an option; it’s what stops your business from taking over your life.

Heat isn’t just an inconvenience – it can also be a cash drain, with new Barclays research finding that a quarter of small businesses lost productivity this summer because of the hot weather.

While large companies have the resources to kit themselves out with air conditioning units, small businesses like cafes, workshops, or compact offices have nowhere to hide from the heat. As a result, they’re left dealing with quieter footfall, queasy staff members, and concentration that trails off during the hottest hours. 

With scorching heatwaves expected to become the norm rather than an exception, we explain how smaller businesses can prepare for next summer without burning through their budget.

Productivity dropped for over a quarter of small businesses this summer

The UK endured a series of heatwaves this summer, with the mercury hitting 38C in parts of London in August. Aside from sleepless nights and scorched green spaces, the extreme heat also majorly dented small business productivity, new research from Barclays finds.

The survey, which polled 1,000 businesses and 2,000 consumers in late July, found that over a quarter of small businesses lost productivity this summer, with dizzying heat impacting staff concentration levels, prompting regular breaks, and pushing core activities outside of work hours to dodge the worst of the heat. 

Economists increasingly accept that heat is a drag on productivity, with Robert Marks, lead climate economist at Oxford Economics, warning that temperatures in the high 30s and low 40s would “likely lead to substantial productivity losses” across sectors including construction, retail, and hospitality.

But worker behaviour isn’t the only way extreme heat hits the bottom line of businesses. Warm weather also reshapes customer behaviour, with Barclays’s research finding that consumers avoid shopping in-person when temperatures hit above 25.1°C, unless it’s for drinks, cooling products or for a trip to an outdoor venue. 

This all lands the hardest on small businesses. Unlike larger firms, which can fall back on air-conditioned spaces and flexible working policies, small businesses have far less room to adapt to rising temperatures. Without that safety net, many business owners are taking things into their own hands.

Businesses respond with makeshift measures, but do they go far enough?

Small businesses have been forced to adapt to the relentless heat quickly. Barclays research shows 28% of businesses introduced wellbeing measures, 23% now offer flexible or remote working options when temperatures surge, and 21% shifted their core working hours to avoid the worst of the afternoon sun.

When temperatures were at their peak, many had to pause operations completely, including Toad Bakery in Camberwell, which closed its doors for a day in June as kitchen temperatures climbed to levels unsafe for staff. 

While these actions offer short-term relief, they’re designed to get through a hot week, not prepare for a hotter future – and the future is arriving faster than many business experts. The Met Office projects Britain will see four heatwaves a year within 50 years, as well as an increase in the number of days over 25 degrees in the shorter term. 

The message for small businesses is clear. Heat is becoming a permanent fixture for businesses in the UK, and those who plan for it now will be in a much stronger position once the thermometer strikes again. Thankfully, adopting doesn’t need to break the bank; it just requires a little foresight and a handful of practical changes.

While the temperature may be cooling, things are heating up on social media this September, with the new month bringing a batch of fresh online trends worth paying attention to. 

From the inspirational and playful to the downright bizarre, social media marketing offers brands an organic way to reach their target customers – without shelling out a fortune on polished advertising. 

However, even for the chronically online among us, spotting which formats are cutting through isn’t always an easy feat. To help you stay ahead of the curve, we’ve compiled a list of viral trends creating a buzz on social media this September.

Viral moments don’t last forever, but strong audience connections do. Read our TikTok for Business guide to discover how to create impactful content that keeps your brand relevant or check out Startups.co.uk’s Instagram to see our advice in action.

With summer winding down, there’s no better time to get back out there and start expanding your professional network. Whether you’re looking to hone your craft or develop a venture, it’s the perfect time to meet new people and see where a conversation can lead you.

If stuffy meeting rooms aren’t your thing, you’re in luck – an increasing number of networking events are breaking away from the norm. From cosy co-working mornings and park walks to drag bingo, there are plenty of opportunities to network in a way that suits you this month.

The best thing? You don’t even need to leave your local area to meet like-minded professionals. We’ve compiled a list of the best free networking events happening up and down the country so you can hit the ground running this September.

A new Red Flag report by BTG has found that the number of British firms in critical financial distress has risen 9% to 53,756, as businesses continue to be squeezed by higher operating costs, rising taxes, and elevated borrowing costs.

Hospitality remains one of the worst-hit industries, with a total of 510 hotels and accommodations experiencing a marked deterioration in profits – a 26.6% jump from 403 a year ago – far outpacing the UK average.

While critical financial distress isn’t a guarantee of going bust, BTG also recorded a 15.7% rise in winding-up petitions in 2025, adding to concerns that insolvencies are climbing higher across the country.

However, as pressure mounts, there are steps businesses can take to manage costs and improve their financial resilience.

More UK businesses are being pushed to the brink

British financial advisory firm BTG has just released its quarterly Red Flag report, and the findings paint a bleak picture of the health of UK businesses. 

All but one of the 22 sectors investigated recorded a rise in companies under critical distress – a metric BTG uses to describe businesses facing severe liquidity shortages, creditor enforcement, or formal legal action, including winding-up petitions. 

The leisure and culture sector was the worst affected, with a total of 1,478 businesses being classed as critically distressed – up 27.1% year-on-year. Hotel and accommodation businesses trailed in close second, serving as a reminder that customer-facing industries are particularly vulnerable to recent cutbacks in discretionary spending. 

 The Red Flag report also points to mounting overdue tax liabilities, with HMRC currently being owed around £27 billion in corporation tax, PAYE, and VAT at the end of 2025 – a stark indication of the cash-flow pressure facing indebted businesses. 

Against this backdrop, BTG executive chairman Ric Traynor warned that there appears to be “no relief in sight” for distressed businesses. 

He explains: “Whilst the extent of the impact is still unknown, the escalation in winding-up petitions is an ominous sign”, adding that when confidence and spending remain subdued, the resulting shockwaves will likely be felt across many other industries later this year and into 2027.

What support can businesses expect from Andy Burnham’s new government?

As the number of businesses in financial dire straits grows, BTG is calling for greater clarity from the government, especially with rising energy prices expected to push inflation higher this Autumn. 

Ric Traynor suggests that instead of another sweeping rescue package, certainty would prevent business owners from being caught out by further cost increases, or would at least give them more time to plan for what lies ahead. 

While new Prime Minister Andy Burnham did recently introduce a 20% business-rates cut for pubs, social clubs, and qualifying live-music venues from April 2027, the measure is relatively narrow and does little to support the wider leisure and cultural sector, while hotels and other forms of accommodation were left out completely.  

There is, however, some movement on hotels. On the 24th of August, the Treasury launched an independent review of how pubs and hotels are valued for business rates. The review is intended to address unfairness in the sector, with pubs and hotels currently being taxed on how much money they make, rather than their floor space, like retailers. 

Despite these small steps, the main question for struggling businesses is whether measures will be enough to make a substantial difference to their finances, and whether they provide enough certainty to keep costs predictable.

As the majority of the EU’s Packaging and Packaging Waste Regulation (PPWR) came into effect on the 12th of August, small ecommerce businesses have been left reeling – but not in the way many expected.

The recycling and labelling rules don’t actually apply until 2028 to 2030, but businesses are required to register and pay compliance fees separately in every EU country they ship to today – regardless of the size of their operation – with costs ranging from €300 to €1,100 per market, per year.

With small sellers’ margins already stretched thin, we spoke to compliance experts, fulfillment specialists, and business owners, to unpack what the new rules mean in practice, and to help you decide whether the cost of staying in the EU market will be worth it.

New PPWR rules: what rules changed on the 12th of August?

After an 18-month transition period, most of the PPRW provisions took effect on August 12, 2026, marking the start of active legal compliance obligations for businesses selling goods to the EU. 

Rather than requiring businesses to redesign packaging or switch materials overnight, the initial rules focus on who is responsible for the packaging entering the EU market and proving it with paperwork.

In practice, this involves issuing a declaration for each type of packaging they use and registering with each EU state’s Extended Producer Responsibility (EPR) scheme individually, as there’s no EU-wide registration. Most states also require sellers to appoint an in-state “authorised representative” to handle registration on their behalf.  

Sophie Ashley, Head of Marketing at Parcel2Go, says this distinction is where most of the confusion lies: “What kicked in on 12 August is the compliance side, registration… The bit everyone pictures when they hear “packaging regulation”, recyclability, labelling, changing materials, is still years off.”

Despite this, many sellers are rushing to change their packaging unnecessarily. Lee Bryan, founder and CEO at Arcus Compliance, has a message for those jumping the gun: “If you are redesigning your outer packaging this month against numbers that do not exist yet, you are guessing with your own money.”

Why the new packaging rules disproportionately hurt small businesses

Experts and small businesses agree that the main sticking point of these new rules is the fixed costs. Since PPWR compliance costs are charged per country, not by parcel or revenue unit, microbusinesses are subject to the same fees as large corporations. 

Lee Bryan sees this play out across every business he advises. “Forty parcels a month costs roughly what forty thousand costs. Compliance has stopped scaling with revenue and started scaling with the number of flags on your shipping map,” Bryan told us, highlighting the imbalance. 

For many businesses, the cost of entering each EU market could reach four figures, even if they send a low number of parcels to the country. Natasha Dauncey, Founder & Owner of Apothaka Skincare, has experienced this firsthand.

“Even if I just send a few parcels a year to EU markets, I’m now faced with registration fees of 300-1100 Euros per market per year, plus authorised rep fees,” Dauncey tells us, adding “These fees are the same whether you’re a solo-run business or a massive corporation, which is inherently unfair.”

With the cost of staying compliant, in many cases, exceeding the packaging fees themselves, the burden of PPWR is landing hardest on the businesses least equipped to absorb it.

As a result, small sellers are being forced to make difficult decisions, from scaling back EU trade to dropping out of the market for the foreseeable future.

Automatic crackdowns are forcing many small sellers to leave the EU market

As tempting as it may be to ignore the paperwork and hope for the best, the risks of not complying with PPWR regulations are real. According to Lee Bryan, instead of non-compliant parcels being stopped at the border, the check now happens on the listing page itself. 

“Marketplaces have to check that a seller is registered before they can trade, and fulfilment providers sit in the same chain. What that produces is not a fine, it is a delisting. No warning, no negotiation, no inspection,” Byran tells us, adding that this automated enforcement is causing many sellers to retreat rather than take risks.

This is reinforced by Natasha Dauncey, who says “most microbusinesses have had to stop shipping to the EU as they simply can’t afford the cost” associated with registrations and authorised representatives. 

There’s an irony to the timing, too. The EU is discussing exempting EU-based micro businesses from requiring an authorised representative. But with the relief unlikely to extend to the UK, many smaller sellers are still facing the same fixed costs.

What can small sellers do to stay on top of PPWR?

While the costs of staying compliant will force some smaller sellers out of the EU market, there are still ways to manage the new regulations rather than retreat entirely.  

Lee Bryan recommends avoiding spreading your sales too thinly and narrowing your focus to markets that create meaningful revenue: “Pick the three or four countries that actually pay, register there, appoint there, and stop dribbling single orders into another twelve where you will never recover the fixed cost.” 

For sellers with enough sales volume, shifting the legal responsibility to an EU-based partner can prove to be more affordable than managing registrations yourself.

He explains that if an established EU business places your goods on the market, the producer role sits with them rather than with you, “for anyone with real volume, it is usually cheaper than running 27 relationships.”

Finally, don’t make an impulsive decision to pull out of the EU market; crunch the numbers first. If EU sales make up a small fraction of your overall revenue, and sales are spread out among several countries, retreating might be the sensible move.

But if a handful of markets are driving consistent revenue, it may be worth absorbing these fixed costs rather than walking away from the income altogether.

You finish the job. You do it well. Then you send the invoice, and the wait begins. A day passes, then a week. You start wondering whether to say something. You draft the message, delete it, soften it, and send it. And you tell yourself this is just part of running your own thing.

The reason invoices sit unpaid usually isn’t that the customer won’t pay – it’s that paying you is mildly annoying. You send a PDF or a sort code over WhatsApp or through your accounting software, and now they have to open their banking app, copy the numbers, type the reference correctly, and actually press send.

All of it is easy to put off until “later”, and later has a habit of becoming three weeks. According to research conducted by Sage, last year, 44% of all small business invoices were paid late. The Office of the Small Business Commissioner says the scourge of late payments costs the UK economy around £11 billion every year.

We’ve included the fix to this in our brand new Startups Business Toolkit: a built-in payment link designed to remove that friction entirely.

Send your next invoice with a pay-now link

Professional invoices, automatic reminders, card payments — all for free.

Try Free Invoices

Make paying you the easy option

When your invoice carries a built-in payment link – pay now, by card, in two taps – settling up stops being a chore your customer has to find time for. They tap, they pay, you both move on.

The difference this makes is striking. Stripe, which handles payments for businesses around the world, reports that 87% of the invoices sent through its system are paid within 24 hours, and that customers pay roughly three times faster when offered one-tap options like Apple Pay and Google Pay.

Research conducted by accountancy platform Xero has found much the same: businesses that add online payment to their invoices get paid up to twice as fast.

With the Startups Business Toolkit, you can create invoices with a custom payment link, decked out in your business’s branding.

Give people the way they want to pay

There’s a simple advantage hiding here, too. According to accounting platform Xero, Most customers would prefer to tap a card than fiddle with a bank transfer – 86% say card is their preferred way to pay – yet only around 55% of small businesses actually offer it.

Just letting people pay the way they already want to puts you ahead of more than half the field, and quietly makes your one-person business feel as easy to deal with as a big one.

Look professional, chase less, get paid sooner

This is exactly what the Get Paid side of the new Startups Business Toolkit is built for. You can send a branded, professional invoice in about 60 seconds, with a payment link built in so clients pay by card or bank transfer in a couple of taps.

Keep on top of your finances by tracking which invoices have been paid with the Startups Business Toolkit.

If an invoice does run late, automatic reminders do the chasing for you – politely, on time, so you never have to send that message again. And a single dashboard shows you exactly what’s been paid and what’s still outstanding, so you always know where you stand.

Our invoicing and payment tools are available for free, with all payments handled securely by FCA-regulated payments processor Stripe. So why not take it out for a spin? The next invoice you send could be the last one you have to chase.

Send your next invoice with a pay-now link

Professional invoices, automatic reminders, card payments — free to start.

Try Free Invoices