29 December 2016
2016 is nearly over! We start off our round up by noting the anniversary of our acquisition of Kinsey Jones, the Gosforth-based chartered accountancy firm which joined us in Autumn 2015. It’s been a great year of getting to know our new colleagues and clients and we very much look forward to further developing our Newcastle business in 2017.
Our blogs this year have recorded increasing burdens of legislation and taxation, whilst in the background a political storm has been brewing that can only create uncertainty for the year ahead. But we live in exciting and challenging times and with those come opportunities for investment and growth.
A glance at our blog posts in 2016 reveals a couple of subjects that cropped up with some frequency: employment and residential lettings. Both are examples of entrepreneurs becoming the unwilling instruments of government’s attempts at social engineering: in the first instance, increasing wage rates whilst encouraging workers and employers to make pension contributions; in the second, imposing measures on landlords to try to remedy the housing shortage.
This has been the year in which most SMEs have had their initial encounter with auto-enrolment, making the payroll task more onerous and costly. The introduction of the National Living Wage is yet another burden on employers in sectors where wage rates are traditionally low.
The residential lettings sector has been growing and we therefore dedicated a series of articles to it earlier in the year. In the last couple of years we have seen the abolition of wear-and-tear allowance, a 3% increase in Stamp Duty on the purchase of houses bought to let, higher rates of Capital Gains Tax on the sale of let properties and the phasing out of higher-rate tax relief on buy-to-let mortgages. Recent surveys have found that one in four landlords are planning to sell their portfolios and more than half intend to raise rents to compensate for the extra tax payable.
The really new development we have seen in 2016 is the populist revolt against austerity and globalisation evidenced by the EU referendum result and the election of Donald Trump. As a consequence we, as entrepreneurs, have to face up to operating in a radically different climate, possibly one of tariffs, trade barriers, reduced foreign inward investment and, most of all, uncertainty. We may currently be in a honeymoon period where exporters are assisted by a weaker pound whose inflationary effects on imported goods have yet to filter through. But other challenges lie ahead. This might be a good opportunity to take the first steps into exporting or to increase your export offering.
It could also be the last chance to obtain Government financial assistance for your business projects. There are many grants available in this region but those that are part of the European Regional Development Fund will almost certainly disappear. Having said that, the incentive (details undisclosed) offered to Nissan to retain its Teesside car plant are a sign that the Government is willing to support local enterprise. If you have expansion or investment plans it is worth talking to us to find out if you qualify for any support.
Many businesses and educational and research institutions have come to rely on workers from the rest of the EU for a wide range of skills. Retaining these people and attracting more will become more difficult in the future. Now could be the time to review your recruitment and training strategies. There is no doubt that further surprises lie in wait for us in the New Year. As ever, we need to remain open to fresh ideas and ensure that we are nimble, flexible and ready to take advantage of any circumstances that arise. We are always available to listen to your thoughts and ideas and to bring our experience and expertise to bear as appropriate. Why not give us a call in the New Year to find out how we can help?