UK inflation fell to its lowest level in more than a year last month, but small business owners should read the number for what it is: a snapshot of a June that has already been overtaken by events.

Figures published by the Office for National Statistics on Wednesday showed inflation cooled to 2.6 per cent on an annual basis in June, down from 2.8 per cent the previous month. City economists had forecast 2.7 per cent. It was the lowest reading since March 2025.

The driver was fuel. Diesel fell by 10.7p to 176.4p per litre between May and June, and petrol dropped 2.1p to 155.3p, after the United States and Iran signed a memorandum of understanding to stop fighting for 60 days and global oil prices slid.

For any firm running vans, plant or a delivery fleet, that was a genuine reprieve. It may also prove a short one. Fighting resumed in July and oil has jumped by around a fifth in the past month, which is likely to push inflation back up in the second half of the year.

Grant Fitzner, chief economist at the ONS, said: “A fall in motor fuel prices, particularly diesel, helped ease inflation in June.”

“Food prices fell this month, driven by products including chocolate, margarine and beef. Clothing prices also fell with the start of summer sales, with bigger discounts than last year.”

Grocery price growth slowed to 1.7 per cent over the year to June, from 2.2 per cent, the lowest annual food inflation rate since August 2024. Hospitality operators and food retailers working on thin margins will take that where they can get it.

The more telling figure for business owners sits further down the release. Services inflation, the measure the Bank of England watches most closely for domestically generated price pressure, inched down only to 3.6 per cent from 3.7 per cent. Core inflation, stripping out food and energy, was flat at 2.6 per cent.

In other words, the fall was imported and the sticky domestic bit has barely moved. That is why the Bank’s monetary policy committee, which meets next Thursday, is expected to leave Bank Rate unchanged at 3.75 per cent. Governor Andrew Bailey has already indicated that cuts are off the table for now, so any SME that has pencilled cheaper borrowing into its second-half cash-flow forecast should sharpen the pencil.

The data lands well for Andy Burnham in his first week as prime minister, following public borrowing figures of £16 billion in June that came in nearly £5 billion below the same month last year. Unemployment was stable at 4.9 per cent in the three months to May.

John Healey, the chancellor, said: “Falling inflation is news families want to hear but there is much more to do to give people the breathing space they need.

“That is why yesterday we cut VAT on electricity bills and today we’re announcing a £2 cap on bus fares from January. We have chosen to focus on the cost of living in our first week, signalling that concern for working people will be at the heart of everything we do.”

The two measures, VAT removed from electricity bills from October and most single bus fares in England capped at £2, are aimed squarely at households. Business owners should check the small print before budgeting for relief: the VAT cut applies to domestic electricity supplies, not commercial ones, and VAT-registered firms reclaim the tax on energy in any case.

The read-across for SMEs is modest but real. Cheaper household energy and transport support consumer spending, and flat unemployment suggests demand is holding. What has not changed is the cost of money, the cost of employing people, or the direction of oil. June was the good month. Plan for the rest of the year on that basis.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

Ford is recalling nearly 388,000 SUVs because an issue with the second-row easy-entry seats could increase the risk of injury, according to federal regulators.

A total of 387,911 vehicles are affected, including certain 2020-2026 Ford Explorer and 2020-2027 Lincoln Aviator models, the National Highway Traffic Safety Administration (NHTSA) said in its recall notice.

The NHTSA said the vehicles may have a defect that could cause a second-row seat to tip or slide unexpectedly while the vehicle is moving.

FORD RECALLS MORE THAN 110,000 MUSTANG VEHICLES OVER WINDSHIELD WIPER, DRIVETRAIN DEFECTS

Ford is recalling nearly 388,000 vehicles over an issue with the second-row seating that could raise the risk of injury. (Getty Images / Getty Images)

“A seat that moves unexpectedly may not properly restrain an occupant during a crash, increasing the risk of injury,” the NHTSA said.

“The switch for the easy-entry second-row outer seats may bind or stick, resulting in the seats unlatching, tipping, or sliding unexpectedly,” the agency explained.

The agency noted some warning signs that vehicle owners should keep an eye out for.

A total of 387,911 vehicles are affected by the recall. (Christopher Dilts/Bloomberg via Getty Images / Getty Images)

“If the button is stuck in the down position, the customer may not be able to use the easy entry feature or return the seat to its normal position after using the easy entry feature,” the notice reads.

Ford’s Critical Concern Review Group identified 14 reports as of June 16, 2026, of unintended second-row seat movement while the vehicle was in drive. Six involved vehicles that had already received a remedy under an earlier recall, while eight involved vehicles that were not covered by the previous campaign. Ford said it was not aware of any crashes or injuries related to the issue.

BMW RECALLS NEARLY 30K VEHICLES OVER ENGINE STARTER DEFECT THAT COULD CAUSE FIRE

The NHTSA said the vehicles may have a defect that could prevent occupants from being properly restrained. (Jeff Kowalsky/Bloomberg via Getty Images  / Getty Images)

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Owners will be instructed to take their vehicles to a Ford or Lincoln dealership, where the second-row easy-entry switch bezel and housing will be replaced with a revised design at no charge.

Owner notification letters will be mailed out later this month, with another letter about the remedy expected to be sent out in January.

The UK rate of inflation has slowed to 2.6% in the year to June, driven down by lower fuel prices, according to new figures.

The June rate of inflation fell from the 2.8% recorded for the year to May, the Office for National Statistics (ONS) said.

Food prices also fell, driven by products such as chocolate, beef and margarine.

ONS chief economist Grant Fitzner said: “A fall in motor fuel prices, particularly diesel, helped ease inflation in June.”

Most discussions about restructuring focus on the federal tax code. This is where buzzwords like IRC Section 368 and tax-free reorganization come into play.

What is often overlooked are the state and local tax bills that wouldn’t care if they were a Type A merger or Type C reorganization and send you a bill anyway.

How reorganization type shapes your local tax exposure

Under Internal Revenue Code (IRC) Section 368, the major reorganization structures are defined, and each one of them has different local tax implications which are entirely untouched by federal deferral.

A Type A reorganization is a statutory merger or consolidation. While the federal requirements to obtain tax-free treatment are the most permissive of any structure – you can have boot with the shareholders and still qualify – a consolidation or merger of two legal entities will trigger real property transfer taxes. This may be based on the fair market value of the real estate or on the mortgage that encumbers it, but either way, it’s a potentially large hit. Most of the taxes of this type are based on equitable ownership of the property changing. That would trigger the tax and I don’t know of any way to get out of it, even if the transfer is tax-free for federal income tax purposes.

Type B reorganizations – stock-for-stock purchases – leave the target entity in place as a subsidiary, so there is no immediate transfer of assets. As a result, they cause the fewest local tax surprises, although one must always be careful of successor liability and nexus.

Type C reorganizations occur when the acquiring corporation obtains substantially all of the target’s assets. Here, thinking through local tax consequences is especially important because most asset transfers trigger sales tax on the tangible personal property involved. In many instances, intangibles that are transferred in connection with a sales transaction are also subject to sales tax, although the states may not advertise in advance that they will be looking for these.

Nexus follows people and property – even after a restructure

An unexpected restructuring surprise that is both relatively common and often underestimated is unwelcome nexus expansion.

Like with a competitor acquisition, the realization of new payroll tax filing obligations in multiple states and municipalities with no prior presence can easily cause panic. A remote team in three new states means three potential new nexus positions, plus the new city payroll and property taxes we’ll touch on shortly. A hotel room of a W-2 employee from the acquired company working in a new city will require local registration. Opening payroll tax accounts is a given. Had the target company established payroll/withholding nexus in multiple jurisdictions the acquirer did not know about? That doesn’t go away.

An unsung hero of state and local tax liabilities is property taxes or the gross receipts taxes often paid by businesses that lease property. Special care is needed to ensure potential exposures from the target’s operations are fully evaluated and considered. For example, filing dominion and control forms to report particular kinds of business personal property tax liabilities can be a particularly revealing methodology. Dozens of states still impose these taxes, many jurisdictions have ‘silent’ filings that expose operations you might have otherwise flown under the radar, and questions from tax authorities could generate queries that open audit pathways for years to come.

Entity conversions carry their own local tax penalties

Converting a business entity – an LLC to a C-Corporation, an S-Corporation to a C-Corporation – is often viewed as a non-event. From a local tax perspective, it’s anything but.

When a pass-through entity converts to a C-Corporation, deferred tax liabilities can accelerate immediately. Net operating loss carryforwards built up under the prior entity structure may not survive the conversion, depending on state rules. At the federal level, IRC Section 382 limits how NOLs can be used after an ownership change; a number of states apply comparable restrictions disqualifying local NOL carryforwards in their entirety.

The transition from pass-through to double taxation is also one deserving of special attention. Under a C-Corporation structure, income is first taxed at the entity level and again upon distribution to shareholders. For businesses operating in high-tax jurisdictions, this secondary tax multiplies fast.

The Pass-Through Entity Tax election available in most states does provide a partial solution – it lets eligible entities pay state income tax at the entity level, indirectly preserving the deduction at the federal level and bypassing the SALT cap. However, entities converting mid-year need to decide if they can still make this election and determine the timing implications.

How restructuring reshapes the apportionment formula

For companies operating in multiple jurisdictions, local corporate income taxes are determined by an apportionment formula – a mix of sales, property, and payroll. All three of these components can be impacted by a merger or acquisition. Post-deal, the acquiring company’s business may have more employees in a high-tax city, thus resulting in more income being apportioned to that jurisdiction. If the acquisition added real estate in another municipality, local taxable income is likely to increase there, too. A change in the sales factor – including all-important single-sales-factor jurisdictions – can have a major impact on the state in which the greatest part of taxable income is apportioned.

A higher overall local corporate tax bill may be in order, just because the apportionment factors have tilted a bit more in the taxing authority’s favor. A flat revenue company post purchase may still have millions of new tax exposure. The only way to effectively manage this risk is to complete accurate apportionment factor projections prior to completing the transaction.

The capitalization trap: what you can and cannot deduct

Legal fees, accounting fees, and advisory costs are often treated as current deductions in a corporate restructuring, but in many cases that’s incorrect. Under the more general Section 263(a) of the Internal Revenue Code, costs that facilitate a capital transaction have to be capitalized. The regulations say that the deductibility of costs that facilitate a capital transaction is governed by a facts-and-circumstances test and that the treatment of these fees is based on the nature of the underlying transaction.

For example, the regulations distinguish between costs incurred in investigating or otherwise pursuing the acquisition, creation, or organization of an entity and costs incurred while facilitating the acquisition. Investigative costs are sometimes currently deductible rather than capitalized, but costs facilitating a capital transaction are generally capitalizable once a transaction has been identified as a specific entity and negotiation and or decision to acquire that entity begin.

At the local level, the treatment gets more complicated. Some jurisdictions follow the federal rules on capitalization; others have their own standards. Deductions that are allowable federally may not flow through to the local return without adjustment. Businesses navigating this kind of cross-jurisdictional complexity are often best served by consulting the best CPA in Queens, NY, since the capitalization question has to be answered separately for each return.

Successor liability: the hidden debt that comes with the deal

When you acquire a company you also acquire exposure to the mistakes the target made in the past. For the most part, a buyer that purchases business assets without obtaining a proper series of clearance certificates becomes legally responsible for the seller’s unpaid taxes – sales taxes, payroll taxes, franchise taxes, local business taxes.

This is known as successor liability and it’s not just a concept. Acquiring entities for predecessor tax debts are aggressively pursued by tax officials. The series of clearance certificates where the state or municipality certifies that there are no unpaid taxes is the protection, but it takes time and must be requested and received prior to closing the transaction. If the timeline doesn’t permit this request or response, then there is an escrow holdback covering the estimated tax exposure.

The majority of acquiring companies first request tax returns and then request the backup documentation to the return to support the filed numbers. In some cases, acquisitions happen before the first tax returns are filed. For those acquisitions, a charge or return for informative research with the major tax jurisdictions for the preceding five years is part of due diligence. The clearance certificate is specific that all applicable returns have been filed, which is why there are frequently late-stage filings post-transaction close.

NYC’s dual tax system requires parallel planning tracks

Businesses operating in New York City face a tax environment that runs on two tracks simultaneously. The New York City General Corporation Tax applies to corporations doing business, owning property, or employing capital within the five boroughs. The Unincorporated Business Tax applies to partnerships and sole proprietors. These are separate tax systems with separate rates, separate filing requirements, and separate administrative rules.

During a corporate restructuring, both can be implicated at once. If the transaction involves entities taxed under the GCT and others subject to the UBT, the combined entity may have obligations under both regimes in the transition year. Local tax auditors are particularly focused on the final returns of dissolved or merged entities – those returns attract scrutiny for constructive dividends, improper expense allocations, and deductions that don’t hold up under local rules.

Localized compliance burdens in environments like New York City can create effective tax rate differences of 5% to 8% compared to neighboring jurisdictions in the same metropolitan area. That kind of variance means that where exactly a business is registered and operating matters as much as how it’s structured. Working with advisors who know the GCT and UBT mechanics is essential during a complex corporate transition, because generalists will miss things that show up later as penalties and back taxes.

Post-restructure audits are more targeted than most people expect

Local tax collectors don’t tend to go easier on restructured entities than they go on operating concerns. When a business terminates, joins itself to another, or changes its legal form, those final tax filings are apt to be subjected to more audit rather than less.

Auditors review transfer pricing to see if deductions or income were inappropriately pushed into the returning entity’s final return. Deductions of costs or losses taken in the liquidation year that should have been capital or spread over a longer period into ongoing businesses. Income deferred beyond the point when the entity’s founders lost the power to declare it. Particularly in closely held firms associated with retirement of the owners, constructive dividends.

The best protection is documentation. Keep meticulous records for costs, categories of business expenses, and the like. During a restructuring event, add solid evidence of what each expense item brought to the company – whether it was an ordinary and necessary business expense for the year in question, or had a direct effect on income, whether for laying foundations for future profit and loss, and so on. Build that paper trail sooner than later.

Corporate restructuring creates real value when it’s executed well. The federal mechanics get the most planning attention, but the local and municipal layer is where the unexpected costs live – and where thorough, jurisdiction-specific advice pays for itself several times over.

Most small businesses do not lose customers because their product is impossible to understand. They lose them because the first few minutes feel harder than they should.

A visitor lands on a website, sees too many options, cannot work out the next step and leaves. The same thing happens in shops, apps, subscription services and even B2B sales. People do not always reject an offer because it is poor. Sometimes they simply run out of patience before they understand its value.

Gaming businesses have spent years dealing with this problem. They know that a player who feels confused in the opening minutes may never return. The lesson for UK SMEs is not to turn every product into a game. It is to make the path from interest to action clearer.

The first few minutes matter more than most businesses admit

A game has a limited window to explain itself. Players need to understand the controls, the purpose and the reward for continuing. If the introduction gives them too much information at once, they stop. If it gives them too little, they do not know what to do.

The same principle applies to a business website. A homepage should answer three basic questions quickly:

• What does this business offer?
• Who is it for?
• What should I do next?

Many SMEs make this harder by trying to say everything at once. They use long introductions, several competing calls to action and broad claims that could apply to any company in the sector. A visitor should not need to scroll through half a page to learn what the business actually does.

A clearer approach works better. State the offer in plain English. Give the visitor one sensible next step. Then provide more detail for people who want it.

That is not about reducing a business to a slogan. It is about respecting the fact that people make quick decisions online.

Too much choice can make people do nothing

More options do not always lead to more sales. If every option appears equally important, customers may delay a decision or abandon the process entirely.

Gaming platforms handle this by grouping choices in ways that make sense to the user. A person does not need to see every possible title or format at once. They need a route that helps them find what they came for.

The same thinking can help almost any small business. A tradesperson might divide services by property type or job size. A marketing agency could separate its support for start-ups, growing firms and established companies. A retailer may help shoppers browse by occasion, budget or need rather than by a long list of product names.

Clear categories do not limit choice. They make choice manageable.

The wording matters too. Labels should be obvious. A category called “Solutions” may sound polished, but it tells customers very little. “Bookkeeping for small businesses” or “Emergency plumbing repairs” tells them exactly where to go.

Good navigation gives people confidence

Customers are more likely to continue when they understand where they are and what happens next. This is one reason clear navigation matters so much.

A platform that separates online slots, online roulette and Megaways slots gives visitors a straightforward way to find a familiar type of game instead of searching through an unstructured list. The same rule applies outside gaming. People should not have to guess which page contains the information they need.

For SMEs, this often means reviewing the website from the customer’s point of view rather than the owner’s. Business owners already know how their services fit together. New visitors do not.

Ask a few simple questions:

• Can someone find the main service in one or two clicks?
• Do page headings match the words customers use?
• Is the contact route easy to spot?
• Does each page explain what happens after an enquiry?

If the answer to any of these is no, the site may be creating work for the customer before the business has earned their trust.

Feedback makes people more likely to continue

Games are good at showing progress. A player can see that they have completed a task, learned a new skill or moved closer to a goal. That feeling encourages them to keep going.

Businesses can use the same principle without adding points, badges or gimmicks. Customers simply need reassurance that their action has worked.

After someone completes an enquiry form, tell them when they can expect a reply. After they place an order, make the delivery process clear. After they sign up for a service, explain the next stage in simple terms.

Silence creates uncertainty. A customer who submits their details and receives no confirmation may wonder if the form worked. A client who has paid an invoice but receives no update may question what happens next. These are small moments, but they shape how reliable a business feels.

The best customer journeys make progress visible. They do not leave people guessing.

Return visits have to be earned

Many businesses spend heavily on finding new customers, then give little thought to the experience after the first purchase. That is expensive and short-sighted.

Games understand that people return when there is a reason to return. It may be new content, a challenge, a social connection or the simple feeling that progress has not been lost. The equivalent for a small business might be useful follow-up, reliable service or a reason to buy again.

A local retailer could send a helpful reminder when a product needs replacing. A service business could offer an annual check-up. A software provider could explain a useful feature that customers may have missed. The key is relevance.

Not every message needs to be a sales pitch. In fact, repeated sales messages can weaken the relationship if they arrive without a clear reason. Customers remember businesses that make their lives easier, not businesses that only contact them when they want another payment.

Data should explain behaviour, not replace judgement

Gaming companies watch how players move through a product. They look at where people stop, which features they use and what brings them back. SMEs can learn from that, even with far smaller budgets.

Website analytics, customer questions and sales conversations can reveal where people become uncertain. If many visitors leave from the same page, the problem may be unclear wording or a missing piece of information. If customers repeatedly ask the same question before buying, the answer should probably be easier to find.

Data is useful when it leads to a practical change. It is less useful when it becomes a collection of numbers with no action behind it.

A small business does not need a complex dashboard to improve. It may only need to notice that people struggle with a booking form, do not understand pricing or cannot find a phone number on mobile.

The aim is not to make business childish

There is a temptation to talk about “gamification” whenever games and business appear in the same conversation. That often leads to pointless features: badges nobody wants, loyalty systems that are too complicated and rewards that do not match what customers value.

The better lesson is simpler. Make the customer’s next step obvious. Remove avoidable confusion. Give people useful feedback. Make a return visit feel worthwhile.

UK SMEs do not need to copy the gaming industry. They can learn from its understanding of attention. When people know what to do, why it matters and what happens next, they are far more likely to stay.