Giuseppe<\/a> continues, stating British businesses are in need of more support:<\/strong>\u00a0\u201cCuts to the bank base rate however may provide a lifeline for many businesses calling out for affordable borrowing. But for many, this could be the final straw in the pursuit of business continuity. All eyes now turn to the Treasury: will the Spring Forecast deliver further hope for growth or a return to doom and gloom for British business?\u201d<\/p>\n\u201cAs ever, our message would be for businesses to act early if they anticipate financial trouble. Doing so ensures that more options are available for you to secure a profitable future and remain trading.\u201d<\/p>\n
\nIn December, the Insolvency Service released statistics which revealed a 6% decline in company insolvencies in December 2024 compared to November 2024, which is 14% lower than December 2023. This is due to businesses beginning to adapt to an increased post-budget tax burden. This offers a glimmer of hope for businesses, who are hopeful that 2025 will see a further decline in company insolvencies.<\/strong><\/p>\nA Year of Economic Uncertainty<\/h3>\n
2024 was a year of financial uncertainty, with two separate Governments searching for the golden ticket to achieve economic growth. Reduced business confidence was the result of this uncertainty, as well as a high base rate and an enhanced tax burden for businesses.<\/p>\n
While the December statistics suggest a sense of economic stability, businesses will likely resist the trend. The New Year is expected to follow the same trend, with continued hikes in the cost of hiring and retaining staff, further strained by the changes to employers NIC contributions leading many businesses into financial hardship. Furthermore, for businesses looking to cover costs through an exit, increases to business asset disposal relief (BADR) and capital gains tax (CGT) will result in reduced asset values and higher tax liabilities, which leads to lower returns and less disposable income.<\/p>\n
Opportunities Amid Reduced Competition<\/h3>\n
The reduced market competition could provide a competitive advantage for some. However, where there is a lack of stability or uncertainty in the economy, companies who have strong foundations are presented with opportunity to grow. But on the other hand, those companies with a shorter foresight are going to begin to fall.<\/p>\n
As ever, our message to businesses would be to act early If they anticipate financial trouble. By acknowledging the potential trouble early on ensures that more options are available and as a result, secures a profitable future and enables businesses to remain trading.<\/p>\n
Please do get in touch<\/h3>\n
If you have any questions, please do get in contact via the contact form below:<\/p>\n
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