It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Sally Appleton, a partner at independent accounting firm, Saffery, in Yorkshire.
There’s no doubt 2024 was a year of two distinct halves. The first part was dominated by the legacy of high inflation. Businesses had to manage their cost base and this inflationary environment carefully, but thankfully inflation did ease midway through the year.
In the second half of the year, the focus was around the new government and what the Budget would have in store for businesses and individuals. Since then, impending hefty increases to National Insurance bills have dominated and this will remain a key factor in 2025. There’s now a greater concern around labour and the associated cost base, and for those watching cash carefully, this cost is suddenly their priority – especially in businesses that are very labour intensive.
Hospitality, leisure and retail businesses for example, that often employ lots of people, face soaring costs and detailed planning and cash flow forecasting is more important than ever, because charging customers more isn’t necessarily the answer in a price sensitive market.
On the other hand, there are businesses that want to invest in new technology and AI that might reduce the need to employ so many people. This would also see them taking advantage of the favourable corporation tax treatment that’s available for certain types of investments.
Entrepreneurial businesses will always see opportunities, but lots are having to weigh up whether the National Insurance burden and other cost pressures mean they delay their expansion plans.
Yorkshire is also home to lots of farms, rural businesses and family-owned firms, which are suddenly having to navigate the changes to inheritance tax and reevaluate their succession plans, and this will remain a theme during 2025.
In fact, the importance of revisiting succession plans in 2025 should not be underestimated, following the tax reforms announced in the Budget, including the £1 million limit on the value of assets qualifying for 100% Business Property Relief (BPR) or Agricultural Property Relief (APR).
Crucially, there are also a lot of macro-economic factors at play, with the likes of the US and China increasingly impacting what happens on a very local level here in Yorkshire. Often our local economy can be susceptible to sudden changes in global markets, especially when it comes to supply chains and local businesses that operate worldwide.
As an accountant and trusted business and tax adviser, our role is also constantly evolving. We must have the best people in our team to ensure that we can provide quality advice as well as always adding value to our clients. Our core aim is to look after our clients’ business interests and work out how we can turn changes into opportunities.
This spans day to day planning and cash flow management right through to creating the most efficient succession plans. We are also keen to develop local networks and bring businesses from similar industries together to learn from each other and share best practice, which is all going to be important as we head into 2025.
