Anna’s Accountancy Alerts – Week 51 (20th – 26th March 2023)

Anna’s Accountancy Alerts - Week 51 (20th - 26th March 2023)

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UK business update

The UK’s business confidence has dropped to a 13-year low, according to a survey conducted by the Institute of Chartered Accountants in England and Wales (ICAEW).

The ICAEW’s latest Business Confidence Monitor (BCM) showed that record high inflation and rising costs, including energy and the cost-of-living crisis, have adversely affected business confidence.

The latest monitor showed confidence had fallen to -23.4 for Q1 2023, the lowest since the global financial crisis of 2009. This has dropped considerably when compared to -16.9 for Q4 2022.

Small firms and financing

Many small firms in the UK face challenges when it comes to finding and applying for funding, according to a report published by the Federation of Small Businesses (FSB).

The FSB’s report found that ‘widespread uncertainty’ exists among small businesses in regard to where to get information on the types of finance available to them.

Two thirds of small firms stated that they are planning to make some form of investment in their business by 2024. However, only 49% said that they have information on the different types of financing options available to them.

Pensioners and self assessment tax returns

HMRC has revealed that more pensioners filed a tax return for the 2020/21 tax year compared to young people.

Overall, those aged 65 and over accounted for 16% of individuals who submitted a tax return, whereas 16 to 24-year-olds made up 2.7% of total filers.

The largest group of self assessment filers were 45 to 54-year-olds, who accounted for 24% of all tax returns submitted.

The data also showed that almost 146,000 people submitted their tax return at the earliest opportunity between 6 and 11 April 2021.

While saving for the future might not seem a priority given today’s cost of living pressures, cutting pension contributions could do more harm in the long term than good in the short term.

Which? calculated the impact of reducing or pausing pension contributions for three years, based on a 30-year-old with a salary of £30,000 and an existing pension worth £20,000. Halving individual contributions from 4% to 2% for three years would reduce their final pot by £4,000, while leaving the scheme completely for three years would see them missing out on more than £17,000.

Keep up to date with all things Accounting and Finance with my bi-weekly Accountancy Alerts. 

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