A report from Starling Bank is urging business owners to get on board with digital financial tools as it claims it could reduce their admin load and save them money. 

The findings suggest that UK SMEs spend an average of £63,000 a year managing their finances, and, with the transition to Making Tax Digital, this could increase as businesses invest in new MTD-compliant software. 

However, Starling argues that rather than escalating costs, moving to digital practices will save businesses time and money, leaving them with more space to innovate. 

The report also argues that transitioning to digital tools will bolster the wider economy, allowing us to catch up with countries like France and Germany. Such a move could result in the generation of £10.4 billion in new tax receipts, giving us the means to significantly bridge the gap with our continental neighbours.  

Almost half of businesses don’t plan to increase digital tool usage

The study presented an overall healthy picture of the use of digital financial tools in the UK, with the survey taking in 1000 business owners and finding that 84% of SMEs already use digital tools for some financial tasks.

The Starling team says that it is microbusinesses that have the most to gain. Sole traders could see a £4.1 to £4.9 billion productivity boost from wider and deeper adoption, which is 20% of the total future benefit. However, businesses with 1-9 employees, could account for double this with £7.0 to £9.4 billion of benefit. 

However, despite the initial positive outlook, the survey also revealed that only around half of those businesses (48% of respondents) are planning on increasing their usage, even as the Government pushes ahead with its digital overhaul. 

While the impact of non-compliance with MTD is an issue in itself, the survey reveals that businesses are losing out in real time if they are wedded to manual processes. “Where digital tools are used for financial tasks, SMEs report an average time saving of 41% over manual processes,” state the researchers.

What is holding SMEs back?

Delving into SME owners’ concerns, the survey found that there are huge misconceptions about digital financial offerings – the most damaging of all being that they are simply too expensive for many ventures to afford. 

Researchers discovered that a large number of SMEs believe digital tax software could cost them nearly £12,000 a year. In reality, this is “fifteen times the price of some high-end solutions”. Not only does this reflect a lack of awareness of digital financial tools’ market offering, but also a more basic absence of understanding around the realities of digital financial management as an industry.

This sentiment is further emphasised by the report’s findings. It revealed that whilst 83% of SMEs and 78% of sole traders are aware of digital tax submissions tools and 77% are aware of digital invoicing tools, the “…depth of such knowledge was inconsistent, with some individuals possessing only a surface-level understanding.”

There is rising concern that a lack of financial literacy is holding some business owners back, something that this survey only serves to support. In October, we reported on data from Xero, which uncovered that more than a third of SME owners were unaware if their business was profitable last month, while 55% admitted that they avoid dealing with finances.

Education and support needed

Starling Bank is using the findings to advocate for the Government to push education to help dismantle preconceptions, and to give SME owners the knowledge and confidence to push ahead with their digital financial transformations. 

It is calling for the creation of a new online ‘Financial Tool Cost Calculator’ within the Government’s Business Growth Service, “to show SMEs the true, lower cost of digital financial tools.”

This would give businesses clear guidance on how much tools will cost them so that they can plan accordingly. In the meantime, some of the biggest providers in key spaces like invoicing have a large range of packages to meet different budgets. 

There are also embedded finance options that cover more aspects of business finance, including account reconciliation and tracking expenses. 

Business owners need to consider exactly what their needs are and then find tools that match. It’s possible that they simply want to digitise common manual tasks, but they may also need software that delivers more. For example, some businesses may benefit from forecasting tools that crunch data to help strategic planning, or inventory tools that help deliver cost savings. 

Starling is by no means alone in calling on business owners to push ahead and get financially savvy. However, the bank is also urging those who have taken the first steps to keep on top of what is on offer to stay ahead of the game. 

Businesses are being urged to review their current business rates valuation before the deadline at the end of March, ahead of the new rates which will come into force from 1 April.

This follows widespread calls from businesses, particularly those in the hospitality industry, for reforms to the business rates system, which has been labelled unfair.

For small businesses, this marks an important, but narrow, window to straighten out errors that could otherwise lock in higher-rate bills for years to come.

Why this matters for small businesses

Business rates have been a topic of ongoing discussion among small businesses. In the last Budget, the revaluation of rates was announced and is set to come in from this April.

Business rates have long been a high fixed cost that many SMEs struggle to manage. This is particularly true for RHL (Retail, Hospitality, and Leisure) businesses, which face higher overheads than online businesses due to having physical premises. This imbalance has only been further amplified by the end of the 40% RHL relief on 31 March. 

Going forward, the relief will be replaced with permanently lower multipliers for these sectors, alongside a support package worth billions. The new business rates system will take effect from April 1, which means there will be a major reevaluation of all non-domestic properties.

Those valued at under £500,000 will then pay lower rates, which will be compensated by increased rates for properties with higher rateable values.

Now, the Valuation Office Agency (VOA) is allowing businesses to correct any inaccurate information it holds about business properties, such as their size, layout or usage. This information will be used to determine the revaluation, which in turn will decide which multiplier your property will fall under.

This means that if there’s any inaccurate information held by the VOA that’s left unchecked, it could lead to paying higher rates than necessary.

What businesses need to do now

To check the details on file or request a change, you need to have a business rates valuation account, which requires you to have a Government Gateway or One Login account. 

It can take up to 15 working days to register and claim a business property. This means that if you’ve not already set this up in good time, you may risk missing the 31 March deadline. If you miss the deadline this year, the next revaluation is in three years. So if you think your valuation could be wrong, start the process immediately.

Reviewing the details held by the VOA is the only way to ensure that your business rates bills are accurate and in line with your property. Acting now will make sure that businesses don’t miss the opportunity to access the fairest rates. 

Social media makes it easy for customers to share their experiences online, which can be both a blessing and a curse. 

Happy customers can boost your reputation and attract new business, but a single negative post can also spiral into reputational damage overnight, even when complaints are exaggerated, misdirected, or even untrue. 

And while large brands can more easily bounce back with PR teams and legal support, small businesses may lack the resources to recover so quickly. So, how can small businesses best respond in the case of online criticism to minimise impact?

Why small businesses are uniquely vulnerable to online backlash

Small businesses often rely heavily on local reputation, customer retention, and word of mouth. This means a viral post on platforms such as TikTok, Instagram, or X can quickly dominate the online conversation and have serious real-life consequences. 

The Guardian recently reported that several US businesses had been victims of online criticism. One example was a California-based sandwich shop that was forced to close after its menu prices were mocked in a viral Reddit post.

While closing down is the worst-case scenario, negative online reviews can very easily result in reduced footfall and damaged profits.

That’s not to say that customers shouldn’t share honest criticism. In many cases, the problem lies with the fact that social media algorithms reward polarising content that provokes strong reactions. This leads to more creators making extreme comments for the sake of engagement, and for small businesses, this can spiral out of control. 

How to respond — engage, ignore or escalate?

Ignoring criticism can signal that customer experience isn’t your priority. But responding publicly can push engagement and attract more eyes to the initial complaint.

To make matters worse, SMEs don’t often have dedicated PR teams on hand to deal with complaints, which can lead to your reply being subject to further scrutiny if it misses the mark.

It’s important to remember that you’re under no obligation to respond publicly. Equally, don’t feel the pressure to match the customer’s tone. It can be tempting to defend your business with a fierce comeback, but it’ll often add fuel to the fire and come across as unprofessional.

Instead, it can be best to move conversations offline and limit responses, rather than engaging in a back-and-forth. 

Practical lessons for SMEs

You can’t stamp out online criticism entirely, but you can reduce its impact by taking some practical steps.

Building a strong base of loyal customers and actively encouraging them to share positive experiences can balance out criticism, making it less likely that a single negative post will tank your reputation.

It also helps to set clear protocols about how and when to respond publicly and when to step back, rather than reacting emotionally in the heat of the moment. 

Finally, don’t ignore the very real emotional impact of online criticism. Receiving negative comments online can feel overwhelming, but maintaining perspective, leaning on support networks, and taking time away from social media can help you stay grounded and recover more quickly.

In a bid to support employee wellbeing, some UK employers are going well beyond free gym memberships and fruit bowls. As reported by The Guardian, companies across the UK are working with professional beekeepers to install beehives at their offices. 

While some might baulk at the prospect of sharing the office with a colony of bees, the initiative is designed to reduce stress, build community and reconnect staff with nature. Demand for unusual workplace wellness schemes is rising, as employers look for more meaningful ways to fight burnout and disengagement, especially among hybrid workplaces. 

In support of beehives specifically, advocates say that the shared responsibility for maintaining the fragile living ecosystem creates a calm sense of focus and collective purpose that more conventional HR perks may fail to deliver.

Beehives and other ‘off-piste’ wellbeing ideas

Office apiaries are just one example of a growing list of unconventional workplace wellness initiatives. They sit alongside everything from cold water plunging and forest bathing to sound healing, breathwork workshops, and digital detox retreats. 

While some might view these as more niche practices, they often share a common thread: creating distance from screens, encouraging presence and togetherness, and offering something symbolic and memorable rather than purely transactional.

Emma Buckley, chief executive of Buckley’s Bees, a provider of office beehives, said: “Our motivation is improving people’s mental health, which employers increasingly understand is closely linked to nature.” 

And this approach clearly resonates with businesses adopting hives. Phillip Potts, general manager of Park House on London’s Oxford Street, told The Guardian: “A gym discount or fruit bowl is nice, but the bees create a shared story and a sense of stewardship.”

However, while such initiatives may work well for larger organisations with space and the budget for specialist partners, they’re likely to be impractical for small businesses.

In addition, beehives require professional care, suitable environments and careful consideration of environmental impact. From a biodiversity standpoint, conservation groups have warned that an influx of managed apiaries can also put pressure on fragile wild insect populations.

What small businesses can realistically learn from this trend

For SMEs, it may be less about rushing to hop onto the beehive bandwagon and more about understanding and gaining inspiration from why it resonates with employees. Then, you can explore more manageable ways to make a similar impact.

Clearly, initiatives that foster shared experiences and a reconnection with nature, as well as encouraging a sense of care, work well – especially when they interrupt the monotony of the working day.

Examples include protected time for non-work activities, team volunteering days, walking or outdoor meetings, creative lunchtime clubs, or rotating responsibility for something communal, such as a shared project or local cause. 

Crucially, many of these activities require little time and financial investment, but cultivate a sense of trust and intentionality in the workplace

Accessible wellbeing ideas that actually work

The office beehive trend is part of a broader shift towards wellbeing strategies that create meaningful space to breathe throughout the working day. 

But it’s important to note that while more symbolic wellness trends are legitimately beneficial, they shouldn’t replace tangible, and often essential, benefits such as healthcare plans, parental leave, and flexible working.

A combination of both practical and more thoughtful benefits hits the sweet spot. And the most effective benefits can often be the simple things that make work feel more human, such as minimised out-of-hours communication, meeting-free time, and simply giving employees more control over how work is done.

From April 2026, the UK Government will be enforcing reforms for statutory sick pay (SSP) under the new Employment Rights Act.

Under this law, employees will be given day-one rights to receive sick pay. The original three-day waiting period will be scrapped, allowing employees to get SSP from their first day of illness.

The new reforms will also remove the Lower Earnings Limit (LEL), meaning all employees will be eligible to receive payment regardless of income.

While this comes as good news for workers, this leaves businesses — particularly smaller firms — facing challenges in managing staff absences, additional costs, and general productivity.

As SSP becomes more accessible, SMEs will need to adapt their policies and practices to ensure they can continue to operate smoothly while still supporting their workforce.

The UK faces record-level of short-term absences

UK workforces have faced a drastic rise in short-term sickness absences over the last year.

Absence levels reached a record high of 9.4 days in 2025. Short-term absences in particular continue to be a pain point for businesses, as 37% of HR professionals say that high levels of short-term and frequent absence is their primary challenge when it comes to managing sickness. 

And business productivity is suffering as a result, especially for smaller businesses with a tighter budget. According to Unum, UK SMEs have lost £29bn annually due to sickness-related productivity losses, and there are calls for Government support and investment in employee health.

Mark Till, Chief Executive Officer at Unum said: “Now is the time to act and act and unlock greater investments into employee wellbeing.

“UK SMEs are under pressure: sickness absences are at their highest in 15 years, productivity is flatlining and budgets are tighter than ever. With the right policy framework, SMEs can unlock productivity and growth through better wellbeing investment.”

How will day-one SSP rights affect businesses?

The Government’s reforms for SSP rights are expected to start on 6 April 2026. As part of these reforms, SSP will be available to all workers from day one, rather than after three days.  Those off sick on low wages will also either receive 80% of their average weekly earnings or the £118.75 per week rate for SSP (whichever is lower).

However, for small businesses already struggling to manage staff absence, these changes could place more financial and administrative pressure on operations. As well as increased payroll costs, managers may have to spend more time processing SSP claims, monitoring absences, and adjusting work schedules to cover absent staff.

Unsurprisingly, many employers are concerned about these impacts, as a survey by Peninsula reveals that 42% of firms believe changes to the SSP will have a negative impact on their business. 

“Under the new rules, even brief periods of sickness that currently attract little or no SSP will become payable,” Tracey Burke, senior HR consultant at WorkNest told Personnel Today.

“For part-time and lower-paid employees, SSP could cover a much larger proportion of their usual earnings, reducing the financial impact of taking time off sick. Therefore, the risk of higher absence rates cannot be ignored.”

How can SMEs stay on top of managing absences?

With SSP becoming payable from day one, SMEs should be proactive in managing short-term absences. 

For example, promoting a healthy workplace — such as encouraging breaks and wellbeing initiatives like mental health support through an Employee Assistance Programme can help reduce the likelihood of sickness in the first place.

Additionally, clear and transparent sickness policies are a must. Employees should know how to report absences, what evidence is required, and how SSP interacts with other company benefits. This will help prevent confusion and ensure absences are legitimate and properly documented.

Flexibility can also go a long way, such as offering remote work, flexible working arrangements, or phased returns after illness. Monitoring absence patterns and addressing any recurring issues early on (such as through meetings or additional support) can help stop short-term problems from becoming long-term disruptions.

As for managing productivity, maintaining employee engagement, training staff to cover different roles, and using easy-to-manage absence tracking tools can help your business keep on top of important work even when people are off sick.

When put together, these actions can help better prepare SMEs to handle new SSP rules without major disruption or added stress to business operations.

Major retailers Urban Outfitters and Dreams have come under fire for allegedly hiring through gig economy apps, raising concerns that some workers may be earning less than the National Minimum Wage.

As a result, the Trades Union Congress (TUC) has called on the UK Government to fast-track reforms to better protect gig economy workers and close loopholes that allow employers to avoid basic employment rights.

Platforms such as Temper allow businesses to hire short-term temporary staff, but critics say the system can leave workers vulnerable to delayed payments and fees that may reduce wages below the legal limits.

With millions of people now relying on gig work as their main source of income and the introduction of the Employment Rights Act, it begs the question whether smaller firms can truly benefit from gig economy apps, or if they’re just a legal headache waiting to happen.

Companies facing scrutiny over gig economy hiring

Major retailers Urban Outfitters and Dreams have been criticised for reportedly using the Temper gig economy app to hire temporary workers.

The platform, which has over 487K workers across the UK and the Netherlands, connects businesses with temporary staff for short-term roles.

According to The Guardian, Urban Outfitters had been advertising roles on the platform — such as stock and sales assistants — paying £12.50 an hour. Similarly, Dreams allegedly advertised a number of delivery driver positions, ranging from £12.71 to £15.14 per hour.

Meanwhile, Colicci Cafe, a family-owned business that runs cafes in London’s Royal Parks, were also reported to have offered barista shifts on the app for £12.50 an hour, though a spokesperson claimed the hourly rate was an error and has since been corrected.

But while the advertised positions were above the current National Minimum Wage (£12.21 per hour), workers using the Temper platform would have to wait 30 days to receive payment. If they didn’t want to wait, they’d have to pay a 2.9% fee, which could bring their wages below the NMW threshold.

Last year, several retailers, including Uniqlo, Lush, and Gymshark, stopped using gig economy apps following concerns over workers’ rights, like the minimum wage, sick leave, and holiday pay.

“Cynical bosses should not be able to exploit gaps in the law to deny workers proper pay and conditions.” Paul Nowak, general secretary of the TUC, told The Guardian.

“The historic Employment Rights Act will bring welcome new protections. But without action on bogus self-employment, bad employers will make greater use of legal loopholes and talent platforms to deny workers their rights.”

Why are gig economy apps risky business?

The UK’s gig economy has grown dramatically over the last decade. Today, around 5% of the population — equating to approximately 1.6 million people — are working in gig roles in the country.

The gig economy is useful for workers as it offers flexibility in when and how they work. For businesses, it provides access to a flexible workforce — particularly useful for smaller firms that need more staff during busy periods, but can’t afford to hire more permanent employees.

However, with 20% of gig economy workers now considering it their main source of income, small businesses risk legal challenges if they hire staff this way without basic employment protection.

Not only are rights at risk, but hiring through gig economy apps consistently means potentially underpaying taxes like National Insurance Contributions (NICs) and workplace pension costs. And for smaller businesses, this could result in hefty penalties from HMRC, including 100% of the unpaid contribution with added interest.

Moreover, as with hiring a full-time employee, businesses must also hire gig workers with the same rights, following the introduction of the Employment Rights Act.

This includes offering an employment contract with guaranteed hours to those who have worked regular hours over a 12-week period (unless a worker chooses to remain on a zero-hour contract), complying with “day-one rights” (including sick pay and paternity leave), and paying a cancellation fee to the employee if you cancel or move a shift at short notice.

How can your business use gig economy apps responsibly?

Using gig economy apps to hire workers isn’t illegal, but they must only be used to meet short-term or changing demand, rather than as a permanent workforce.

Gig workers should be hired for tasks that are flexible or project-based, such as seasonal demand or one-off jobs, rather than relying on them as a long-term source of labour. This reduces the risk of worker exploitation and helps businesses comply with employment law.

Businesses should also ensure gig workers are paid fairly, including guaranteeing that they earn at least the minimum wage once expenses are taken into account. 

For example, if you were to use a platform like Temper to hire short-term workers that charge a fee for early payment, it’s important to offer an hourly wage that doesn’t get reduced below the minimum wage when this fee is deducted. 

Alternatively, simply hiring temporary agency staff can give you the same kind of flexibility as gig economy apps. Hiring through a reputable agency can give you access to trained workers for busy periods, and they will handle payroll, taxes, and compliance for you. If you want to hire directly, taking on temporary employees will give you more control over scheduling and ensure employment rights are applied correctly.

Whatever way you want to hire seasonal workers, following requirements from the Employment Rights Act will keep your business compliant, but also protect your reputation and maintain trust with both workers and customers.

The Government has announced that five major UK banks have committed to a “landmark” £11bn lending package designed to help SMEs invest and expand abroad.  

Led by Business Secretary Peter Kyle, the agreement comes at a time when traditional lenders and their efforts to support SMEs are under the spotlight. A group of Labour backbenchers is currently driving reform of banks’ efforts to support SMEs through the Fair Banking Act. 

Although it has not passed as legislation as yet, it does highlight big concerns that traditional avenues to finance are currently problematic for SMEs; and the business finance landscape has changed as a result.

What is the new pot?

The £11bn is earmarked to “help firms invest, hire and expand into new international markets”, and comes fresh off the Prime Minister’s return from trade trips to both China and Japan. 

The roundtable event at which the agreement was signed was attended by Kyle, alongside senior executives from NatWest, HSBC UK, Barclays, Lloyds, and Santander. The deal was lauded as “one of the largest collective moves by the banking sector in over a decade”, and described by Chancellor of the Exchequer Rachel Reeves as providing “the firepower” for SMEs “to take on the world”. 

The agreement also includes “advisory support through banks’ relationship managers” and regional managers from the government’s export credit agency, UK Export Finance (UKEF). UKEF will also guarantee up to 80% of eligible loans issued by each bank. 

How can businesses apply?

Businesses can apply straight away. We talked to a spokesperson from UKEF, who told us: “Business can apply now for a loan directly with the participant banks. They can start by speaking to their high street lender or their regional UKEF Export Finance Manager.”

The spokesperson added: “Each bank has its own criteria, so we encourage firms to speak directly to their preferred lender about the support available.”

Changing trade landscapes

The push for SMEs to expand overseas and bolster their international trade comes as the UK tries to navigate a very volatile and shifting trade landscape. Businesses have been hit hard by the tariffs levied by the Trump Administration and the uncertainty that has come with them. 

Just days ago, research from Paragon Bank revealed that more than one in five of the nation’s SMEs are facing the tariff threat as their single biggest challenge. A quarter of the businesses quizzed said that their profit margins have been directly impacted, and 17% are recording reduced sales. 

Nearly a quarter added that the continued uncertainty around the tariffs is affecting their ability to strategise on the future of their venture. 

New horizons

This breaking of the old order has seen the Government look to different markets. Prime Minister Keir Starmer visited China last month and has now announced a deal that could make it easier for British businesses to access one of the world’s biggest markets. 

While details are still being bashed out, the first change is that British citizens staying in China for less than 30 days will no longer have to apply for a visa, which is an immediate boon for small businesses without large travel budgets. 

However, the Government is also pursuing closer trade ties with the EU, and according to BBC News, the bloc is “open-minded” and “ready to engage”. 

The European Commissioner for Finance, Valdis Dombrovskis, has mooted the possibility of the majority of food checks being removed between the EU and UK, and the establishment of a customs union, which would eliminate some tariffs and cut down red tape. 

For SMEs who are struggling with the uncertainty or have traditionally been reliant on US sales, the new lending scheme could provide the impetus to diversify their customer base and explore new possibilities. 

Business owners are hustling to develop AI capabilities over the coming year. According to a new survey, small businesses have singled out technology as offering their best path to growth. 

However, the findings, which came from both sides of the Atlantic, also uncovered a gap between the resources that US businesses and UK ventures are putting into AI uptake—including seeking expert advice and training their staff—with the US pulling ahead. 

The Government is aware of how fast other countries are iterating, and is pushing hard to fill gaps in AI knowledge. It recently announced that it is backing an expansion of Skills England’s free AI training, which, it is hoped, will see at least two million SME employees taught how to use AI effectively at work by 2030.

AI prioritised

For the survey, American Express Global Business Travel and Ipsos gathered the views of 500 business leaders, both based in the UK and the US. As reported by IT Brief, they discovered that 78% of businesses view adopting new technology as a focus over 2026. 

Becky Power, Vice President of SME Client Management at American Express Global Business Travel, said that the findings mark a significant shift in mentality towards AI and other technologies. 

“Our research shows small and medium-sized businesses are entering a critical phase. AI has moved from a ‘nice-to-have’ to a business imperative. The companies leading this shift are those building and implementing AI operations to solve the talent gap, while doubling down on impactful human connections and relationships that drive new business,” she said.

Different deployment in the US

However, there is a difference in how US businesses and those on this side of the ocean are approaching their technological transformations. 

Over in the US, 40% of businesses shared that they believed getting additional AI advice would help their business grow. In the UK, the percentage was 10% less. That said, in both countries, AI and automation topped the list of advisory services businesses planned to seek out. 

US firms are also ahead of the curve in finding AI-savvy talent to bring in-house. The results revealed that 36% of US SMEs have appointed AI personnel or teams. In the UK, this figure sat at 25%.

Growth encouraged from the top down

The AI talent and knowledge gap is now a national focus in the UK. Yesterday, the Government’s Business and Trade Committee announced “seven priorities for UK economic revival”, and placed the “AI revolution” at the top of the list. 

A result of a year of investigations, the list aims to determine “the issues that matter most to Britain’s economic future”. It lists economic security, regulatory reform, and fostering enterprise; but it is AI, productivity, and the future workforce that is reported as most important. 

The team detailed that its work will now involve “examining how Britain can lead the AI revolution while ensuring workers have the skills and protections needed for the jobs of tomorrow.” Liam Byrne, MP and Chair of the Committee, explained that “AI is rewriting the rules of work”, and the committee promises to drive action on this. 

Playing catch up

While this latest survey suggests that the UK is behind the US in AI deployment among SMEs, other reports have suggested that we are behind many other nations, too. 

We reported last month that, according to research from KPMG, 73% of Brits have received no AI training or education. This research also exposed the fact that the UK was in the bottom third for AI literacy and training, out of the 47 countries surveyed.

In the UK, Government figures reveal that AI-related employment increased to 86,139 in 2024, which was a 33% increase from 2023. The Committee wrote: “Diffusion of AI technologies throughout the economy will be the key to its economic impact.”

However, there are barriers to uptake, especially financial and staffing considerations for SMEs and especially in the current turbulent market conditions. The Government will need to pull out the stops to support businesses otherwise we will continue to fall behind.

We’re two months into 2026, and there are already a ton of trends to jump on for social media marketing.

And while the long winter season is still dragging on, there is a strong element of fun and nostalgia for this month’s most popular trends.

From reminiscing about 2016 and leaning into your brand’s sillier side to leveraging viral songs and playful templates, these trends offer plenty of opportunities to engage your customers in a lighthearted way.

But if you’re not sure where to start, we’ve pulled together seven of the hottest trends for small businesses to jump on in February 2026.

The world of insurance is proving a minefield for many businesses across the UK, who are either not properly insuring all aspects of their business—from their premises to their technology—or have no insurance in place at all. 

Despite the fact that business insurance is a critical safety net, a new survey from the Association of British Insurers (ABI) and Public First has shed light on the levels of “uninsurance” and “underinsurance” in UK small businesses. 

It found that a surprisingly significant number of SMEs don’t have compulsory insurance (for example, 39% of firms with one to nine employees said they didn’t have employers’ liability insurance), while 28% of sole traders reported having no insurance at all.

Insufficient protection

While the need for cyber insurance has hit the headlines in recent weeks, these latest findings suggest that, actually, many small businesses need to completely rethink their insurance protections. 

In particular, underinsurance—when the cover is less than the potential liability—is a widespread issue. The Small Business, Big Risk: Tackling SME Underinsurance project, which surveyed 1,002 SME owners, found that businesses are using insurance policies that fall desperately short of their needs. 

Indeed, 48% of respondents said their business had a physical premises, but less than a quarter had business interruption insurance, while 39% of businesses with company vehicles said they didn’t have commercial vehicle insurance (a compulsory cover).

Technology deployment is also a huge area of concern. More than half (57%) of the respondents reported having portable electronic equipment, but only 31% said they have commercial contents insurance. When it came to software or cloud services, only 29% shared that they had cyber protection insurance.

No regular review processes

The survey also revealed that many small business owners are putting insurance in place, but are not reviewing their policies regularly to ensure that their needs are still being met. “Only half of respondents said they had reviewed the types of insurance they hold or their level of cover in the past 12 months,” the researchers shared. 

As a result, some businesses have areas of their venture that are completely uninsured, and others that are underinsured. Both these scenarios are potentially dangerous. 

A statement accompanying the findings said: “The consequences of inadequate insurance are sometimes catastrophic. We heard of businesses that had to close after experiencing an unexpected incident without sufficient cover.”

Chris Bose, ABI Director of General Insurance Policy, echoed the warning: “SMEs are the backbone of our economy, and having the right insurance protection is essential to helping them stay resilient when the unexpected happens. From cyber incidents to supply chain shocks, the right cover can mean the difference between a temporary setback and a potentially devastating halt to operations.”

What support do SMEs need?

The ABI has created a new guide, which it hopes will clarify what different insurance products are available to small businesses, as well as the most common requirements for them to help them sidestep risks like compliance failures. 

Andrew Harrop, Director at Public First and co-author of the report, said that the guide has been created to counter the prevalent “misunderstanding, low awareness and concerns about affordability” that are stopping SMEs from being covered. 

However, both organisations argue that SMEs need more support from “insurers, intermediaries, business bodies and government”, especially when it comes to education. The release of the guide is being used as an opportunity to lobby for this support.  

The two bodies are arguing for a “time-limited engagement campaign” to boost awareness of the risks of uninsurance and underinsurance, and the benefits of properly insuring your operation. 

Call to action

However, they also state that there is a clear need for insurers to make their products more easily accessible for business owners so they understand exactly what they need and how to get it. More knowledge would better empower businesses to tailor their insurance to their needs, resulting in higher take-up. 

While the survey did reveal that business owners are generally very positive about their insurance policies, the gaps were still glaring, both in terms of coverage and knowledge. 

This survey serves as a warning that complacency or lack of understanding can lead to huge financial issues; but that insurers, brokers and the Government have a role to play in helping SMEs avoid these detrimental scenarios.

Tool theft has been described as an “economic assault” on the UK’s tradespeople. 

The Express has reported that more than 25,500 tool thefts were reported across the UK in 2024, which equates to one theft every 21 minutes. And the stolen equipment is just the start. 

For self-employed traders and small firms especially, the consequences of tool theft include cancelled jobs, downtime, disrupted cash flow, and, of course, the cost of replacement tools, totalling an estimated £56m. So how can tradespeople protect themselves against this worrying trend?

Why tradespeople are being targeted

The data suggests theft is becoming more organised and targeted. Nearly half of reported incidents are van-related, making vehicles the primary point of vulnerability. 

According to The Express, thieves are increasingly tracking routes, identifying poorly lit parking areas, and striking when vans are fully loaded, particularly during the darker months, to avoid being spotted.

Tools are an increasingly popular target for thieves due to how easily they can be sold on. Online marketplaces, informal resale groups, and car boot sales offer thieves a platform to quickly convert stolen equipment into cash. 

This means tool theft is not simply opportunistic, but part of a wider resale ecosystem that, unfortunately, makes targets of hardworking electricians, plumbers, and painters and decorators.

Practical steps businesses can take—beyond insurance

While insurance is an important safety net, it doesn’t protect against the added disruption of lost earnings. 

In response, many tradespeople are opting for layered deterrence measures rather than relying on being reimbursed by insurance providers. 

You can put off thieves by improving van security with visible deterrents such as dash cams and alarm systems, parking strategies that reduce exposure overnight, asset trackers affixed to tools, and tool marking or forensic ID systems that make resale harder. 

It may also help to unload vans overnight or rotate storage locations to make working patterns less predictable for organised theft operations.

Keeping clear documentation is also important, including detailed inventories, serial numbers, and photographic records of tools, as this can speed up police reports and insurance claims while also making resale harder if tools are identifiable or marked as stolen.

What this means for UK small businesses

For tradespeople, tool theft is no longer an occasional inconvenience but a recurring reality.

With average losses now exceeding £2,000 per incident once downtime is accounted for (£1,565 in equipment and a further £623 in lost hours), proactive prevention is better than reactionary responses. 

Treating tools and vehicles as critical business infrastructure and planning accordingly to deter thieves in the first place can help limit disruption to your livelihood.

The government is backing an expansion of Skills England’s free AI training, a series of short, practical courses designed to help workers—including at least two million SME employees—to use AI effectively at work by 2030.

Despite the hype around AI, only a minority of SMEs currently actually use it, often due to a lack of AI skills, confidence, or time. AI adoption across the UK remains uneven, and small businesses might be missing out on the benefits it can offer.

This expansion aims to address this gap. Here’s what SMEs need to know about the programme, and how they can get involved.

What’s being offered — and who it’s for

Under the expanded programme, every adult in the UK is eligible to take free, online AI foundations training through the revamped AI Skills Hub. The goal is to reach 10 million workers by the end of 2030, which has the potential to transform the UK workforce’s relationship to AI and automation. 

Government research shows that the main barrier to the adoption of AI is the widespread ethical concerns that come with it. But the second-biggest barrier is a huge AI skills gap. The free courses are intended to address this gap so that small businesses can access the time and money-saving benefits of automation. 

In as little as 20 minutes, the courses guide users on drafting text, creating content, and automating routine admin tasks, which can offer tangible help in the workplace. Skills England has benchmarked the courses against its AI foundation standards, and completing the courses earns businesses a government-backed digital badge to mark the achievement.

The programme has already delivered over one million courses since last year, and is now being scaled with the support of major employers, public sector bodies, and business groups — including the NHS, Federation of Small Businesses, and British Chambers of Commerce. 

Why this matters for small businesses

Ethical concerns aside, AI adoption is also a question of access.

Research cited alongside the government’s announcement shows that small firms, particularly microbusinesses, are 45% less likely to adopt AI than larger companies, largely due to limited in-house expertise. The programme is intended to grant everybody who wants it the opportunity to gain the necessary skills and knowledge to make the most of AI.

The training is designed to help businesses do more with less, unlocking productivity gains by freeing staff from repetitive tasks so that they can focus on more strategic, high-value work.

FSB Policy Chair Tina McKenzie said: “Small businesses want to make the most of AI, but just under half (46%) say they don’t yet have the skills or knowledge to use it well.” 

“This ambitious partnership will help them – and their workforce – make the most of the new technology.”

What founders and employers should take from this

The programme marks a shift in approach: treating AI skills as basic workplace infrastructure rather than a specialist capability reserved for large firms and tech teams. As PwC UK’s CTO Umang Paw put it: “AI isn’t coming – it’s here, and it’s rewriting the rules of work.”

For small business owners, this creates a rare, low-risk opportunity to build baseline AI literacy across your teams at no cost. As the technology continues to evolve at breakneck speed, understanding how to use AI safely, ethically, and effectively is likely to become a competitive necessity rather than a nice-to-have. 

Initiatives such as this are crucial to help smaller firms stay in step with larger competitors and reduce the risk of being left behind as AI becomes embedded in everyday work, so it’s important to make the most of it.

Last week, the government announced a newly-established partnership with China that will make it easier for British companies to sell services there. This follows repeated calls from UK business groups for clearer rules and better access to setting up links with China.

China holds a significant role in the international business landscape. It’s long been viewed as a high-growth—but equally high-friction—market for UK businesses. This friction is felt particularly by smaller firms without the budgets or local networks needed to succeed overseas. 

The agreement also includes relaxed visa requirements for short-term trips, which will open doors and allow for more flexibility for UK citizens travelling to China on business. 

What’s actually been agreed?

The main headline of the announcement is the new partnership agreed last week following the Prime Minister’s Beijing visit.

The agreement will support partnerships across sectors where the UK already has global prominence, such as professional services, financial services, legal, education, healthcare, and digital services. Both governments will collaborate on a feasibility study into a formal UK-China trade-in-services agreement, which could eventually introduce clearer, legally binding rules for British firms operating in China.

All of these negotiations are still in process. So for smaller businesses, the most immediately practical change will be the newly introduced visa-free travel for British citizens staying in China for less than 30 days. This alleviates a long-standing administrative burden for founders on business trips, making it easier to attend meetings and explore partnerships, which is an important stepping stone to full international expansion.

Business and Trade Secretary Peter Kyle said the partnership responds directly to ongoing requests from UK firms for “clearer rules, better market access, and practical support” to sell services into China.

Why this matters for UK small businesses

The UK is already the second-largest exporter of services to China, with £13bn worth of services sold by UK firms to China each year. Chinese demand is set to rise sharply over the next decade, particularly in expertise-based sectors such as business, financial, and digital services, in which many UK startups already have a strong presence.

For SMEs, the agreement also suggests the government is adopting a more pragmatic approach to helping businesses achieve international growth and supporting market access and finding local partners, areas where smaller firms can struggle most.

Since negotiations are still underway, this won’t be felt as an overnight change. Regulatory complexities and geopolitical risks, such as Trump’s tariffs, remain important considerations, meaning breaking into Chinese markets may still only be a realistic aim for particularly well-prepared SMEs rather than the average early-stage startup.

What should founders take from this?

For UK small businesses hoping to expand internationally, the announcement is a positive sign of the beginning of less friction with China, but it’s not a green light to rush in.

The relaxed visa rules will offer some immediate ease for those already exploring opportunities on the ground in China. And the potential for clearer regulation will hopefully lower some early-stage barriers, particularly for founders in business, financial, and digital services.

As HSBC Chair Brendan Nelson put it, a “strong and balanced economic and commercial relationship” can support growth and jobs, but only if access genuinely improves on the ground.

So for now, the deal signals unlocked opportunities, especially for more mature SMEs looking to expand beyond Europe and the US. It also reinforces the need for careful planning, local expertise, and a realistic risk assessment before exploring the Chinese market.

While, for many ventures, AI is changing the business landscape for the good, a legal expert is urging businesses to get up on the technology, as they can inadvertently fall into legal mires in everything from copyright to data privacy. 

The F&B sector is one of the latest to report positive ROI from AI investments. However, there is also a reported AI skills gap in the UK, which means that companies might be desperate to deploy AI but find themselves lacking people with AI skills. 

This could lead to mistakes with potentially huge implications, both financially and in terms of loss of reputation. 

Copyright calamities

Speaking to IFA Magazine, Kirstin McKnight, practice group leader at commercial law firm LegalVision, said that education is absolutely key for businesses if they want to use AI and avoid legal wrangles or compliance issues. 

According to McKnight, the number one risk for businesses is using AI-outputted material and unintentionally infringing on copyrighted materials in the process. In particular, there have been high-profile legal battles after material protected as Intellectual Property was reportedly used to train AI models. 

This means that someone using AI to create content could find themselves entering prompts and being presented with a response that is actually close to, or identical to, a copyrighted work – whether text, a logo, or an image. 

McKnight advised: “To protect your business, it is essential to carefully review the licensing and terms of service of any AI tool you use. Implement internal review processes to check outputs for potential infringement, and clearly define ownership rights in contracts.” The advice is particularly pertinent if you are using the AI content commercially. 

Misleading information

Caution is also advised as generative AI can be prone to “hallucinations” – false or misleading information that the system presents as correct. If you are a business owner using AI to create marketing material, for example, make sure that you have a human fact-checking process in place. This is something job hunters have neglected at their peril when using AI to help write their CVs. 

According to New Scientist, hallucinations are getting worse. The site reported on a hallucination rate leaderboard that revealed some models had seen double-digit rises in hallucinations from their more recent releases. 

When AI is deployed by organisations in customer-facing capacities, this has led to potentially dangerous situations. A bot used by the New York City authorities, for example, gave out “dangerously inaccurate” advice on everything from housing policy to workers’ rights.

Put frameworks in place

While the EU is working on its own AI framework, businesses can’t be lax about their own governance. McKnight said: “Many businesses adopt AI tools without establishing clear policies. This lack of governance can quickly turn into a serious legal and operational risk as employees may misuse AI, input inappropriate or sensitive data, or fail to recognise harmful outputs, which could lead to data breaches or escalate into costly lawsuits.” 

If you are using AI that’s given access to your customers’ personal data, for example, protocols need to be in place to make sure this data is protected and anonymised, and that permissions have been gained. 

Regulation is key to protecting against these kinds of data protection or compliance slipups. Create a robust AI plan that your employees are trained on. This training also needs to include understanding the compliance rules and regulations that are already in place for AI usage. 

McKnight added: “It is essential to stay informed about evolving regulations, conduct regular audits of AI systems, and design strategies with flexibility so you can adapt quickly to new legal requirements as they emerge.” 

While AI uptake is moving at a dizzying pace, businesses cannot use their lack of understanding or ignorance of the regulations as an excuse if things go wrong. If you’re to deploy AI without risk, constant awareness and alertness are your greatest shield.

New research from 1,000 SMEs across the UK has revealed exactly how much of an impact President Trump’s erratic threats of trade tariffs are having on businesses. 

Data from Paragon Bank has laid bare that more than one in five of the nation’s SMEs say that the tariff threat is their single biggest challenge, placing it above all other concerns, including problems recruiting staff, tax burdens, and regulatory red tape. 

Direct impact on takings

As the world waits on the whim of the US President, businesses in the UK are reporting that they are already feeling the impact of the tariffs. 

In the survey, a quarter of businesses said that their profit margins have already been directly hit, and 17% are recording reduced sales. Among these, 23% said that they were suffering from reduced access to export markets or falling demand from overseas clients. 

22% of business leaders also said that the uncertainty over the future is affecting their ability to strategise, while 20% said that there has been a direct impact on their production time. 

State of limbo

While there seems to be a temporary lull in the tariff storm after the World Economic Forum in Davos, the possibility of escalation remains. Just a week ago, Trump was threatening to introduce new tariffs on eight European countries, including the UK, unless they supported his wishes to buy Greenland.  

In this climate of uncertainty, the survey found that the transportation, storage, and manufacturing sectors are reporting the most vulnerability. 

However, businesses in all sectors pointed to the same issues, with 30% reporting a rise in the cost of imported goods, 28% reporting supply chain disruption, and 27% saying production costs had increased.

Continued turbulence

The trade tariff wrangle has been going on for many years, and unfortunately for businesses, it isn’t showing signs of abating. Some businesses in the UK, therefore, have had no option but to “delay investment decisions or scale back growth plans,” said Phil Hughes, Deputy Managing Director of SME Lending at Paragon Bank.

He added: “Trade tariff disputes have created significant challenges for SMEs, not only those directly involved in import and export markets, but also businesses further down the supply chain.” Hughes recognised that many businesses have shown “resilience in absorbing these rising costs”. 

There have recently been increasingly urgent calls to make funding for SMEs easier to access, as this could prove a lifeline for those businesses that have managed to ride the tariff storms so far, but are not sure how much longer they can continue fighting without sinking.

The UK Government has recently announced a new support package for pubs, giving businesses a 15% cut to business rates bills from April.

This comes following the Government’s decision to backtrack on its plans to increase business rates for pub venues following the 2025 Autumn Budget announcement. 

While this move is being hailed as a major win for pub owners across the country, other hospitality firms — including restaurants, hotels, and cafes — feel overlooked, and have called for the Government to extend the relief across the wider hospitality sector.

The Government unveils business rates relief package for pubs

On Tuesday, the Government revealed a new support package for British pubs, aiming to ease the financial burden caused by rising business rates and boost local communities.

The support package includes slashing business rates by 15% from April, as well as a two-year real-terms freeze, and a review into the method used to value venues for business rates.

This new revelation comes after weeks of commotion from pub landlords after it was announced at the Autumn Budget that business rates would increase for hospitality businesses, causing landlords to bar Labour MPs from their doors in protest.

The Government’s support package aims to save the average pub £1,650 in 2026/27, with around 75% of pubs seeing their bills either drop or stay flat over the same year. It will also announce a new “High Street Strategy”, which is expected to be published later this year.

“If we’re going to restore the pride in our communities, we need our pubs and our high streets to thrive,” Chancellor Rachel Reeves said. 

“We’re backing British pubs with additional support, and our new High Streets Strategy will help tackle the long-term challenges that our much-loved retail, leisure and hospitality businesses have faced.”

Support package leaves wider hospitality sector behind

While pub landlords may be breathing a sigh of relief, restaurants, hotels, and other hospitality firms feel they’ve been left out in the cold.

As the support package only applies to pubs, other hospitality businesses will not be eligible for the relief, and will be expected to pay higher business rates in the new tax year. The Federation of Small Businesses predicts an average rise of 52%.

While Labour MPs have called for a pause on business rate hikes for music venues, restaurants, gyms, nightclubs, and local shops have criticised the Government for not extending this support beyond these establishments.

Michael Kill, Chief Executive of the Night Time Industries Association, told The Guardian that the support package is “little more than a drop in the ocean when set against the reality of the current tax system and the cumulative damage inflicted by the last two budgets.”

Meanwhile, Kate Nicholls, Chair of UKHospitality, said that “the rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution.

“The reality remains that we still have restaurants and hotels facing severe challenges from successive Budgets,” she added. “Without clear action, they will face increasingly tough decisions on business viability, jobs, and prices for customers.”

How should hospitality firms respond?

Hospitality businesses that don’t qualify for the new support package should first check for Small Business Rates Relief (SBBR). Many small pubs, cafés, restaurants, and hotels may already be eligible for SBBR, which can reduce or even eliminate business rates depending on the property’s rateable value.

As Matt Harris, owner of Planet of the Grapes, advises in his latest column for Startups.co.uk, you should check whether the Valuation Office Agency (VOA) has the correct rates for your building, and challenge any inaccuracies before they push up your bill unnecessarily.

It’s also worth exploring other local or sector-specific grants, as some councils and trade bodies offer targeted support for struggling hospitality businesses. For example, short-term financial relief, energy or rent subsidies, or programmes that help businesses recover from post-pandemic challenges.

And with the Government’s High Street Strategy expected later this year, you should keep an eye out for any new support measures or updates to business rates that could benefit your operations.

Discover the ales and ails of hospitality

Planet of the Grapes founder Matt Harris has over 25 years of experience in hospitality. Read his bi-monthly column for Startups now.

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