2022 has been a challenging year in many respects and for many reasons. The cost of living crisis, escalating mortgage interest rate rises, Russia invading Ukraine and a trio of prime ministers – it has been an undoubtedly turbulent year.
The potential impact on businesses throughout this period has yet to be fully understood, but in our final blog post of the year we thought we would take a brief look back at some of the highs and lows.
At the start of the year Covid restrictions in England ended the requirement for mandatory wearing of facemasks and Covid passes. Nevertheless, a lasting legacy of the virus and its aftermath is still impacting many businesses.
UK inflation hit 5.4% at the start of 2022, a 30-year high, and proved to be one of the year’s main themes and one that promises to stick around for some time yet.
In February Russia invaded Ukraine leading to war and the tragic loss of many lives. The impact of this has been far reaching with global prices for oil, gas and food escalating exponentially since.
Whilst June was a celebratory month with Her Majesty, Queen Elizabeth II’s Platinum Jubilee bringing together nations across the world to mark the momentous occasion, September will be remembered for the passing of the Queen, the UK’s longest ever serving monarch, who died peacefully at Balmoral aged 96.
Making Tax Digital for Income Tax Self-Assessment
The implementation of the government’s Making Tax Digital (MTD) initiative has continued to be an extremely hot topic. Making Tax Digital for Income Tax Self-Assessment (ITSA) was originally expected to be implemented in April 2023 but now only this week been pushed back to 2026.
Making Tax Digital for ITSA means that self-employed businesses and landlords with annual business or property income above £10,000 will be required to maintain and report their accounting records electronically using compatible MTD software from April 6th, 2026. First Call Financials will be supporting our client base in being ready for MTD for ITSA when it launches.
Major Payroll Changes Following Supreme Court Judgment
The landmark judgment by the UK Supreme Court on employee holiday entitlements in July, will have a significant impact for businesses across those sectors that employ workers on permanent part-year contracts. This on top of other wage pressures due to high inflation is likely to bring significant challenges for businesses within the hospitality, retail, healthcare and leisure sectors. Our blog post on the topic provides details about the ruling and potential impact.
Political Turmoil and Budget Highlights
A leadership election in July with a short lived appointment in September and an emergency mini-Budget generated turmoil in markets. The pound dropped to its lowest level against the dollar since 1985, and mortgage lenders pulled hundreds of fixed products from the market in fear of the economic and financial repercussions. Throughout the year the UK saw a number of budget announcements ending in November when the Chancellor, Mr. Jeremy Hunt, set out his fiscal statement. The detail and highlights plus potential implications for businesses were covered in depth in our November blog.
2022’s penultimate month kicked off with the largest interest rate hike since 1989 – the UK base rate increased 0.75 percentage points to 3 per cent. Upon announcing the move, the Bank of England said, “the UK was staring down the barrel of its longest recession since records began”.
Our Continued Commitment to you for 2023
There is no crystal ball to help us as we navigate towards 2023 – however, there are certain activities and principles that will support businesses as they head into the new year. At First Call Financials our commitment is to help you, our clients make good business decisions – helping business owners interpret the numbers so that they can make the pressing strategic decisions that secure their future success. For our clients having robust management accounts, financial budgets and forecasts in place is good practice and can make a very real and positive impact on the decisions you need to make as a business owner.
In parallel with this, the onus is on us to ensure we are using accounting technology and software in a way that enables you to facilitate timely, sensible, well-thought-out decisions. At First Call Financials we embrace the latest technologies and use only up-to-date information to help your business grow. We understand the importance of knowing your business and your management figures inside out.
Thank you to our valued clients and contacts for their support during the year. Your support has been the key ingredient to our success, and we promise to continue investing in the best people and innovative technologies to bring you the quality that you deserve.
We wish you and your families a Happy Christmas and a successful and prosperous 2023!
- Spring Budget: Headlines and Key Points - March 20, 2023
- Increases to National Minimum Wage from 1st April 2023 - February 27, 2023
- Goodbye 2022 and what 2023 may bring….. - December 20, 2022
This post was written by Steph Roffey