Unlocking Growth Opportunities – why SMEs plan to expand in the new tax year

The start of the new tax year tends to bring a fresh sense of determination throughout the SME sector. New budgets, updated tax rules, and the upcoming strategic planning period mean many SMEs treat this time of year as the starting line for expansion plans that may have been in development for months. For property developers and investors, 2025 is an opportunity to act decisively.

In the UK, SMEs make up over 99.8% of all businesses, with many operating in property-related sectors. Either through direct ownership and development or through construction and related services. Their confidence to grow is often linked to policy, financing conditions, and market appetite. Tax reforms, combined with new lending products and local investment opportunities, all influence how SMEs choose to expand.

Key Tax Changes Affecting SMEs in 2025

The 2025/26 tax year includes several adjustments that could influence both the structure and cost of business for SMEs.

One notable update is the change to Capital Gains Tax (CGT). The government has reduced the CGT annual exemption to £3,000 for individuals and £1,500 for trusts. This move has implications for SMEs holding or disposing of property, as gains above the exemption thresholds will now attract tax more quickly. However, this may also incentivise reinvestment or earlier sales to lock in gains.

Corporation Tax remains at 25% for businesses with profits over £250,000. However, the full expensing scheme is still in place. This allows businesses to deduct the entire cost of qualifying equipment or capital assets from their taxable profits in the same year they make the purchase. This could be especially useful for property developers investing in things like infrastructure or refurbishment work.

Dividend allowance has also been reduced to £500. For directors or shareholders drawing dividends from SME companies, this adds pressure to reassess remuneration strategies. Combined, these changes may nudge SMEs toward more tax-efficient reinvestment of profits rather than drawing them out.

Key Dates

April is always an important month in the business calendar. The new tax year officially began on April 6th, marking the date when all changes announced in the previous Autumn Statement and Budget came into effect. For SMEs, this also signalled the start of new allowances and thresholds.

April 1st marked the deadline for Corporation Tax payments for accounting periods ending in the previous year. Many companies choose to align their financial year-end with the tax year, making April a natural time to planning, filing, and setting strategic objectives.

Other important dates included April 19th, the final deadline for PAYE payments relating to the preceding tax year. Additionally, April 22nd, when electronic payments for PAYE and Class 1 NICs must have cleared to avoid penalties.

Many SMEs will also be preparing and submitting their Q1 2025 VAT returns in April. This is another reason to check cash flow and working capital – especially for property businesses with abnormal payment patterns.

Where Growth is Happening – and Why

Many property investors are increasingly looking beyond the traditional hotspots of London and the South East, where competition and prices remain high. Instead, the Midlands, North West, and selected areas of South Wales are becoming more attractive for some investors. For example, according to a survey by Purbeck Insurance Services, the most profitable place to run a business is the West Midlands where 52% of SMEs are making a good profit compared to the UK average of 33%.

Cities such as Birmingham, Manchester, and Liverpool continue to show strong demand for both residential and commercial space. These urban centres benefit from continued infrastructure investment, growing student and young professional populations, and rental yields that remain favourable.

In Wales, Cardiff and Swansea are also seeing increased developer interest, spurred by regeneration projects and local authority support for housing schemes. Meanwhile, smaller towns within commutable distance of these cities are seeing increased demand for mixed-use developments.

For SME property investors, these areas offer more accessible entry points. They offer lower acquisition costs, stable returns, and the opportunity to capitalise on local economic growth.

Commercial Bridging Loans – Enabling fast, strategic investment

Speed matters in property acquisitions. Whether your client is acquiring at auction, refinancing an existing asset, or seizing a time-sensitive opportunity, access to short-term capital can make all the difference.

Commercial Bridging Loans have become an essential tool for SMEs looking to fund acquisitions, expansions, or redevelopment. These loans provide fast access to funding and offer more flexibility compared to traditional mortgages. For brokers, this opens a valuable route to support clients who require fast decision-making and quick access to funding.

As part of our commitment to supporting business growth, we have recently made some changes to our Commercial Bridging Loans. Our new LTV rate for our Commercial Bridging Loans has increased to 70%, giving your clients greater borrowing power. This higher LTV is particularly helpful for SMEs looking to minimise their equity input or retain capital for refurbishment.

In addition to the increased LTV, our stepped interest rate structure offers a financial advantage by rewarding shorter borrowing terms. Borrowers benefit from reduced costs when exiting early – whether through sale, refinance, or drawdown of development finance. This approach supports strategic planning and helps SMEs optimise their cash flow during crucial stages of growth.

Whether your client is acquiring a mixed-use property, unlocking equity from an existing commercial unit, or planning a change of use, Commercial Bridging provides a tool to act quickly and decisively.

Final Thoughts

The new tax year brings an opportunity for SMEs with the ambition to grow. For SMEs in property and development, this is a year where agility and access to funding will set the pace.

As a broker, your role in sourcing fast, efficient finance for your clients has never been more important. With updated tax rules, regional opportunities, and improved commercial bridging terms now available, the conditions are in place to help SMEs act on their plans with confidence.

If your client is looking to expand or develop their property portfolio, our Commercial Bridging Loans could be ideal. Your guidance, paired with the right financial solution, will help move their plans forward and make the most of what 2025 has to offer.

If you have any questions about our Commercial Bridging Loans or other Bridging Loans, don’t hesitate to get in touch.