As we approach the end of 2024, everyone at Parkin S Booth wishes you a Merry Christmas and a happy and healthy New Year. Our offices will close on 20th December, and will reopen for business on Thursday 2nd January 2025.

18/12/2024

- With company insolvencies slowing slightly at the end of the year, we hope this is a sign of stability for many business owners, at the end of what has been a turbulent year. With a national election, coupled with other geopolitical issues, such as the American election, the continuation of conflicts in Israel/Palestine and Russia/Ukraine (to name but a few!), 2024 has certainly proved a challenge for most, if not all, business owners. - The big issues anticipated for 2025 are the impact of the various economic policies announced by the now, not so new, Labour government. All industries will be hit by the rise in Employers National Insurance (NIC), with costs mounting for retaining the same people within teams. - Certain industries are expected to be hit harder than others. Those industries who historically recruit employees with lower take-home salaries (because of flexible hours, for example), are expected to be hit hard, as the lower threshold of Employers NIC is reduced significantly, bringing many more employees within the Employers NIC bracket. An increase in employment costs could be the critical point for business owners, tipping the balance towards a less sustainable business. Additionally, certain industries will be hit by the removal or reduction of previous temporary government assistance packages. The hospitality industry is expected to be the worst casualty of this, with previous business rates relief reductions being cut. From April 2025, business rates will be discounted by 40% - whilst a discount is no doubt always welcome, this is a significant reduction in previous discounts of 75%. - Adding to that, the traditional new year slow-down in the hospitality industry is likely to be coupled with customers looking to tighten their purse strings, to help manage interest rate rises and mortgage payment increases – the result being less surplus cash being spent within the hospitality industry. - Whatever 2025 may bring, we hope that business owners can navigate the challenges successfully. As always, understanding your business is absolutely key and managing cashflow is still very much king!

18/12/2024

7 days later....and time to reflect on the Autumn Budget! Having consumed a lot of reports following the Chancellor's Announcement on 30th October, we've had chance to take a breath and consider how the various announcements might impact the owner-managed business ('OMB') community, the wider economy and the insolvency market. The major announcement affecting most OMBs was the increase in employers' national insurance from 6.4.25. There was a double-whammy of a rate increase from 13.8% to 15% and a reduction in the earnings limit, meaning NIC will be paid 'earlier' than currently (employers will pay NIC on earnings above £5,000, reduced from £9,100). The additional costs may be softened slightly by an increase in the Employment Allowance (a reduction in the employer's NIC liability), from £5,000 to £10,500. These coupled with the increase in the rate of the National Minimum Wage from 6.4.25 will add significant cost pressures to most OMBs. The need for business owners to be 'all over' their cashflow projections only increases - the more aware and realistic a business owner is of the business's cash position puts them in a far stronger position to better manage the pressures. These announcements may well provide the proverbial 'last straw' for some businesses. The impact on the local and wider national economy could be profound, with some business owners choosing to 'hang up their boots', either by selling, going down an insolvency route (either insolvent or solvent) or orchestrating some other form of restructuring.

06/11/2024

“Business confidence rises significantly in Wales.” The most recent Institute of Chartered Accountants in England & Wales (ICAEW) survey reports some positivity for the local business community in Wales. The survey covers a range of industries, sectors and company sizes to give a feel for the wider economic feeling across the UK. The most recent survey ran to 20th September 2024 and perhaps reflects more relaxed attitudes after the uncertainty that naturally surrounds any general election. Interestingly, the survey suggests confidence in costs reducing slightly and stronger profit growth expectations (vs last year) but businesses are still reportedly looking to reduce the rate of their capital investment and spend on things like research & development. We’ll be looking out for the similar report for the North West when it is published later this month to see if there are any common themes. We’ll also be keeping a close eye on the wider impact on companies across the region, particularly those encountering financial distress. As always, it’s so important to us here at Parkin S Booth to understand the bigger picture, so that we can provide the best advice to each business owner.

15/10/2024