The mindset that's holding more businesses back than HMRC ever will.
It’s something I hear surprisingly often.
“There’s no point growing because I’ll just pay more tax.”
Or…
“If I have to register for VAT, my prices will have to go up and I’ll lose all my customers.”
Can I let you in on a secret? The tax isn’t what’s holding your business back. Your mindset is.
Let’s use VAT as an example.
You’ve done well. Your business has grown, and you’ve reached the VAT threshold. Instead of celebrating, you panic.
“I need to put my prices up by 20%. My customers won’t pay it.”
But how do you know? Have they told you? Or have you decided for them?
When you refuse to increase your prices, what you’re really saying is:
“I don’t believe I’m worth it.”
That’s a tough sentence to read, but it’s true.
You started your business because you’re passionate about what you do. You wanted to build something of your own. You wanted freedom, flexibility and the chance to be rewarded for your expertise. You didn’t start it to be the cheapest. People don’t always buy the cheapest option. They buy the option they trust. If you’re reliable, knowledgeable, easy to deal with and deliver an excellent service, people will happily pay more. In fact, many customers expect to pay more for quality. The businesses that continue to grow aren’t always the cheapest. They’re the ones that learn how to communicate their value. The same applies to tax.
Yes, if you make more profit, you’ll pay more tax.
But you’ll also have more money.
Would you rather earn £100,000 and pay tax on your profits, or deliberately keep your income low just to avoid a tax bill?
Holding your business back to save tax is like refusing a pay rise because some of it goes to HMRC.
It simply doesn’t make sense.
Growth can feel frightening. Every successful business owner has moments where they wonder whether they’re making the right decision.
It’s a bit like standing on the edge of a bungee jump. You could spend hours worrying about the rope, the height and everything that might go wrong. Or you can trust the person who’s done it hundreds of times before. A good adviser won’t push you off the edge. They’ll show you that the rope has been tested, explain the plan, and give you the confidence to take the leap. That’s exactly what good business advice should do.
Don’t let fear make your decisions.
Make them based on facts, on strategy and on where you want your business to be in five years’ time.
Because the biggest risk isn’t paying more tax.
It’s staying exactly where you are because you were too afraid to grow.
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