Like many small businesses, the firm was paying a flat rate of 12.5% to the government, but in 2025 its accountant warned it was approaching a limit: if the business’s annual turnover exceeded £230,000, the flat rate would no longer apply. “So it was going to cost us tens of thousands of pounds.”

That’s insane that it’s not a marginal tax rate such that they only pay the increased rate on earnings over the threshold (like with income tax). If you leave the Flat Rate Scheme then you can’t rejoin for 12 months.