Credit Control Update: December 2025
As we move into December, it’s a good opportunity to re-assess your credit control strategy, especially in light of the Autumn Budget 2025.
Table of Contents
What’s Changed? Key Autumn Budget Measures
- The government has extended the freeze on personal tax thresholds (for income tax and National Insurance) until 2031.
- From April 2029, a cap will be introduced on National Insurance relief through pension salary-sacrifice schemes: only the first £2,000 of contributions will remain exempt from NICs.
- For businesses: the Autumn Budget continues to support capital-allowance incentives including a 100% first-year allowance for zero-emission vehicles and charging points (extended to March 2027), plus a new first-year allowance of 40% for certain main-rate assets (from January 2026).
- Other changes: revisions to business rates relief schedules, potential increases in indirect taxes, adjustments impacting cash-flow planning for both individuals and companies.
What This Means for Credit Control & Cash Flow Management
Forecasting and liquidity planning become more critical. With frozen thresholds, individuals, customers or smaller businesses may feel squeezed over time as wages potentially rise but thresholds don’t. This could lead to delayed payments or increased risk of late payments. It’s a good moment to revisit cash-flow forecasts for the next 6-12 months, and factor in potential delays.
Reassess payment terms and credit limits. Given potential pressure on clients’ disposable income (due to the tax burden), it may be wise to re-evaluate standard payment terms or credit limits (especially for clients exhibiting signs of financial stress or those with already tight cash flows.)
Encourage early invoicing and tighter follow-up on outstanding debt. With businesses facing cost pressures too (from possible increased business rates, indirect tax effects, or constrained NIC-related employee costs), cash flow could tighten. Firm, proactive invoicing, follow-up on overdue accounts will help safeguard your cash position.
Communicate with clients about potential knock-on effects. As a service provider, it could be prudent to send a short note to clients summarising the Budget’s likely impact on their cash flow and payments therefore helping to set expectations, avoid surprises, and encourage proactive communication if clients anticipate difficulties paying.
Summary
As we close out the year, December’s Credit Control Update highlights just how important it is for businesses to stay proactive, vigilant, and financially prepared. With the launch of the Autumn Budget, many organisations are reviewing what the government’s latest measures mean for their costs, cash flow, and trading outlook going into the new year. The Budget has brought in some changes, however, one thing remains constant: strong cash flow is the foundation that enables every business to adapt with confidence.
For this reason, it’s crucial to action your unpaid invoices before year-end. Once January arrives, customer budgets reset, workloads increase, and payment cycles inevitably slow down. Invoices that go unresolved in December often become significantly harder to recover as they age into the new year.
By tightening your credit control processes now, reviewing overdue accounts, closing disputes, and escalating stubborn debts, you give your business the strongest financial footing possible heading into the year ahead. With change on the horizon following the Autumn Budget, ensuring healthy, predictable cash flow has never been more important.
Finish the year in control, and step into the next one ready for whatever comes next.
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