What actions can directors take to help?
This week is a great example. The National Living Wage, formerly the Minimum Wage, rose for all workers from Monday April 1.
The 1.6 million eligible employees aged 25 and above will receive an extra £690 a year each and the other age groups will also see various rises in their pay packets.
However it’s not all good news as a lot of other essential bills and tariffs also rose this week including:
- Council Tax rises across most authorities in England and Wales – average rise is 4.7% and Inflation is currently 2.1%
- Gas and electric prices rising for half of UK households on variable or default tariffs by an average of £117 a year
- The TV licence fee is rising to £154.50 a year
- The NHS prescription charge in England will now be £9 per product (although this has been abolished in Scotland, Wales and Northern Ireland)
- A small increase in water bills across all providers
- Price of first and second class postage stamps rise
- Various increases in vehicle tax rates
- Rises for some companies mobile, landline and broadband services
The situation becomes even more complicated for small and medium sized businesses with changes to business rates and tax reporting requirements also going live.
Make tax digital
The HMRC’s Make Tax Digital programme is being launched for certain VAT registered companies which could cost users up to £564 on average according to the Federation of Small Businesses (FSB).
There’s some relief for small retailers, pubs and restaurants who have High Street properties in England under a rateable value of £51,000. They will receive a 33% discount on their business rates bills for the next two years.
However the FSB warned that many other SMEs could see a rise of up to 20% in their business rates on top of a regular inflation-linked increase. This is due to a 2017 revaluation falling away.
There will also be an increase in auto-enrolment pension contributions for employers from Saturday April 6 from 2% to 3% and a rise for employees from 3% to 5%.
Conclusions
Starting and running a small business is tough but also one of the most rewarding feelings there is.
If your finances are precarious and you’re worried that this conflagration of rising costs might be too much for your business to bare then speak to us today.
Our team of expert advisors are on hand for a free initial consultation to talk through your available options and how you can survive and thrive in the new financial year.