Businesses across the county need to conduct a full review of their daily operations as they face an uncertain year, a leading Cumbrian accountant has urged.
April marked the first payroll in which employers face significant increases in staff costs following hikes in National Insurance contributions and a rise in National Minimum Wage rates implemented by the Government.
With these increases adding to fear around further tax rises rumoured in Chancellor Rachel Reeves’ Autumn Budget following revelations the Government has borrowed £15bn extra than forecast, and the overhanging threat of ‘Trump tariffs’, businesses need to adapt to overcome this difficult period, said Lindsay Farrer, a managing partner at Carlisle-based Saint & Co Chartered Accountants.
Lindsay Farrer, a Managing Partner at Saint & Co.
Lindsay said: “There is a lot of uncertainty facing businesses and they can expect a bumpy year.
“The rises in staff costs alone are having huge impacts on local businesses and we know of many who are having to cut the hours of their staff or abort recruitment plans just to make sure they can pay their existing staff.
“But it’s not all doom and gloom and businesses can navigate this tricky period by reviewing all aspects of their enterprise and understanding what is – and crucially what isn’t – possible in the current climate.”
Lindsay is offering practical advice to businesses about how to overcome tough economic challenges.
- Calculate increased staff costs and evaluate how much more you will have to pay in staff wages and National Insurance contributions from April 2025 onwards;
- Analyse your current pricing model and understand if you can continue to operate charging the same price. Is there an option of increasing the price you charge to your customers without the risk of losing them?;
- Re-evaluate all growth plans and check if they are still sustainable. Can you still afford the latest piece of equipment or to hire a new recruit without impacting too heavily on your business costs? Or will investment actually help to overcome these difficulties?;
- Update your profit and loss forecasts to implement the changes to staff costs to get a clearer picture of your business performance for the current financial year, and following years;
- If you export to the US, work to secure deals ahead of any impending tariff increases being implemented by Donald Trump;
- On all recurring deals, not just exports, look to secure fixed prices to avoid any price rises in the future, giving you peace of mind that your deal isn’t going to skyrocket with any changes to the market.
Lindsay said: “We all know that the next 12 months will be tricky, and perhaps even longer term, so the responsible thing for businesses to do is plan as best as they can.
“Taking steps to analyse business practices can help mitigate any potential damage, and make sure they can adapt their model to weather the economic storm.”
Saint & Co has nine offices across Cumbria and Dumfries & Galloway and employs more than 120 members of staff.
