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Edward Wheeler on the current chaotic economy

The phrase ‘be careful what you wish for’ comes to mind in reference to recent political and economical events. In previous editions of Euronews I’ve bemoaned the rise in National Insurance, which increased our Group costs by close to £100k over the year, so I was happy to see Liz Truss get into office on a pledge to reverse that increase. But the ‘mini budget’ appears to have caused a major reaction from the markets, which seems counter intuitive to the measures announced.  

I’m now left wondering whether these cost savings are simply going to be wiped out by higher interest rates, leaving us back to square one. The uncertainty over interest rates now appears to be more damaging than the additional tax. Uncertainty affects business decisions when it comes to investment in both human and physical resources, so hopefully the current mess can be sorted out soon.

The significant hike in general taxation in the past few years is frustrating and challenging for business owners – the unofficial, non-paid tax collectors for HMRC. Reducing government waste and improving efficiencies, which means lower taxation, can’t be a bad thing from any viewpoint, surely? In the private sector, businesses that keep a tight control on costs generally have lower pricing to customers as a result, which promotes those businesses over less efficient ones.

We really need more support for businesses that create jobs, which fund people’s lives and the state via taxation. Any government decisions that harm businesses are a self-inflicted wound.

I’m not particularly happy with the IR35 change of heart as one of our frustrations, specifically in the construction market, is the amount of companies with a subcontractor workforce, which are really direct employees being paid as subcontractors. We aren’t just talking about guys on the ground. We see companies with senior managers, who have titles at their companies, also claiming to be self employed freelancers.  Nobody really seems to be looking into this. It would be nice to see bigger companies in the UK policing the practice of disguised employees.

Let’s hope 2023 is better than 2022 from all perspectives.

Published date:
September 30, 2022