A Year in Review: How 2022 Affected Businesses
As 2022 comes to a close, it’s a good time to reflect on what has happened this year for businesses and how we can prepare for 2023.
It’s been another strange year, and one filled with everchanging challenges for businesses – from the Russian invasion of Ukraine to increased energy and fuel bills, we saw three prime ministers and multiple budgets, as well as the passing of Her Royal Highness the Queen. But how have all these events affected businesses?
The Russian Invasion of Ukraine and the resulting Surge in Energy Prices.
The start of the year saw the Russian invasion of Ukraine which impacted many supply chains, the prices of raw materials, energy, intermediate products, and transportation services, driving a rapid increase in inflation across the world.
As demand for energy increased, so did the price, putting a strain on already tight budgets and forcing some businesses to make other cuts or even close their doors permanently. Higher energy bills also made it difficult for businesses to expand or hire new employees, and goods were delivered late or not at all due to transportation costs.
Impacts of COVID-19
Banks raised interest rates to get inflation under control, which pushed up the cost of borrowing for businesses. This comes against a backdrop of higher levels of government debt due to the economic impacts of the COVID-19 pandemic and the current energy crisis. Debt interest spending is now expected to reach a record £120.4 billion this year.
Change in Cabinet
Boris Johnson resigned as Prime Minister and Leader of the Conservative Party in 2022, with Liz Truss elected as his successor in September, only to resign in October and be replaced by Rishi Sunak. With these changes, the corporate tax rate will rise to 25% beginning in April 2023, off-payroll working reforms will be repealed, and national insurance rates will be reduced. If you have any business questions about the Autumn Budget, you can find out more here.
Business Accounting Help for 2023
At Hysons, Chartered Accountants we have the knowledge to make business accounting straightforward. When it comes to business, we understand the value of time. That’s why we offer business accounting services that prevent valuable time and resources from being tied up within your company, allowing you to focus on driving growth. For further information and advice on our business accounting services, contact Hysons and book a free consultation with our team in Hampshire.