Managing Principal Viewpoint
Hoping for a smoother ride
The first few months of 2022 have certainly been memorable.
While it’s been good to gain greater freedoms from the withdrawal of Covid restrictions, a wave of fresh social, political and economic developments has presented challenges for many.
Rewards for those who wait?
With rapidly rising living costs, many hoped the Chancellor’s Spring Statement would tackle more than it did. While the Treasury’s coffers need replenishing post-pandemic, public finance figures on the day suggested Rishi Sunak had £25-30 billion of ‘wiggle’ room to play with.
The number of short-term changes, however, were relatively few. Despite much lobbying, the dividend tax rise and the national insurance contributions (NIC) increases have gone ahead, although the NIC threshold has been revised. Fuel duty on petrol and diesel was reduced by 5p a litre for 12 months.
The main sweetener had its eye on the long-term – an income tax reduction intended to coincide with the 2024 General Election. A Tax Plan was also announced signalling the Autumn Budget’s possible agenda – see page 2.
Hope for peace
At the time of writing this, the war in Ukraine sadly rages on. The crisis is obviously affecting the global stage but also impacting those at home. Supply chain disruption, price hikes and supporting staff affected by the war are just some of the issues our clients are dealing with. Early in the conflict we produced a guide for businesses. Like many businesses, Shipleys has donated to the humanitarian effort.
A recent survey of owner- managed businesses by The Association of Practising Accountants, of which we’re a member, shows that it remains a tough era in which to grow. On a positive note, 81% reported their businesses are in better shape for the future than pre-pandemic. More information in How owner managed businesses are faring in 2022.
Having a strong cash flow position helps businesses ride out tough times. On page 3 we’ve shared some short-term measures to strengthen this vital resource. Another resilience- boosting tool is planning for different eventualities. Some organisations we support are currently budgeting for the 2023 corporation tax increases, the basis period rules change and a new anti-money laundering levy (see pages 4 and 5).
For our private clients, we’ve also included a reminder about using nil rate bands to mitigate liability for inheritance tax and have summarised HMRC’s new powers to recoup unpaid high income child benefit charges (p10).
Strength in numbers
A positive to emerge, which pays testament to organisations’ agility, is the rise of partnering activities and business collaborations. Our Business Club recently discussed this growing trend of businesses joining forces to share greater benefits. See page 9.
Retaining the positives
Other benefits which organisations are keen to retain are those achieved through flexible working during lockdown. Many businesses, Shipleys included, are implementing a hybrid working arrangement where staff split the week working onsite and working from home. See page 5 for considerations regarding the new working environment.
We’re also delighted to share a success story from a client who has worked hard to create the right working space for creative industry businesses. (page 8).
Finally, it’s always nice to recognise the talents within your organisation and reward hard work. On behalf of the Shipleys principals, I am delighted to announce that this May will see a record number of promotions. We have four new principals, two new directors and three new supervisors (see page 7). Some even began their training with us, and it’s been good to watch their progression over the years. Congratulations to all!
I hope the end of spring and the start of summer brings many positives your way. Please do contact us if you need support with any opportunities, challenges or questions. We are always keen to help.
Shipshape articles are intended to create awareness of issues and specific advice should be obtained before taking action, or refraining from taking action in relation to the topics covered. If you would like advice or further information, please speak to your usual Shipleys contact.
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