News Article - 02 March 2007
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The economic downturn caused significant changes for UK businesses in 2009, and many organisations
struggled to cope with the effects of recession. Others were more fortunate and managed to remain profitable
despite the poor market conditions. In the latter half of the year there were early signs of economic recovery,
and competition for market share increased. Access enjoyed a successful year, winning more six-figure contracts
than ever before following a company-wide rebrand in July.
Yet industry commentators believe 2010 will be a tough year for UK businesses. Richard Lambert, CBI Director-General,
has labelled 2010 a ‘year of exceptional challenges for businesses in Britain.’ He blames the poor shape of public finances
and the unresolved banking crisis for many of the upcoming problems companies will face. Mr. Lambert’s scepticism is shared
by Graeme Leach, Chief Economist of the IoD, who feels economic recovery is improbable in 2010.
Whilst it is unclear exactly how the economy will fare in 2010, below is a snapshot of what’s in store this year for UK businesses:
2010 – General Election
The 2010 general election must take place on or before June 3rd. In the face of the economic backdrop, the major parties are expected
to use their pledges to outline plans for economic recovery. Whilst it is unclear this early what these plans will be, policies to kick start
the economy will definitely be high on the agenda. SMEs will be watching the pre-election build up carefully to ensure they can prepare
early for changes and hoping they get the full support of any incoming government.
2010 – Microsoft Office 2010 to be released
Microsoft Office 2010, the latest version of Microsoft’s popular office productivity suite, is due for release in the first half
of 2010. For the first time, the software giant will also offer free in-browser versions of the most popular Office programs,
such as Word. UK businesses will be faced with a number of upgrade choices. Many organisations will be considering or
may already have upgraded to Microsoft’s newest operating system, Windows 7 and the new Office suite might
encourage more to do so. Hardware costs may also have to be considered in organisations with dated systems.
March 31st – New tax reporting language to affect 2010 accounting period
HMRC is advising accountants to prepare early for the new iXBRL tax reporting language. Whilst it doesn’t become
compulsory until 2011, it is expected to affect accounting periods starting March 31st 2010.
April – Compulsory electronic filing of VAT 100 and VAT payments
As HMRC continues its move to digital submission methods, businesses will be required to submit their VAT 100 and
VAT payments electronically. In November 2009, a survey by the Institute of Payroll Professionals called for HMRC
to accept P60s electronically and electronic submission of P45s will become compulsory from 2011.
April – Carbon Reduction Commitment to set mandatory compliance regulations
From April, the UK’s Carbon Reduction Commitment (CRC) will require the UK’s most carbon-intensive businesses to
cut their output by roughly 1.2million tonnes a year. The commitment, seen as the World’s first legally binding carbon-reduction
budget, will help the country achieve its aim of reducing carbon output by 80% by 2050. The CRC is independent of the Copenhagen
Summit, the
heavily criticised global discussion on climate change held in December 2009.
Summer – Companies House to accept iXBRL-based submissions
Companies House will offer the new iXBRL tax reporting language on unaudited accounts before developing it for use with other types of
account. As with all changes like these, businesses would do well to prepare early to help ease the burden on their company.
December 1st – Secretary of State to publish report on efficiency of carbon reporting
The Secretary of State will publish a report outlining the contribution carbon reporting has on reducing carbon output. A positive report
may eventually require UK businesses to upgrade their technology to include carbon-tracking capability.
In addition to these changes, trends that have become apparent over the past year may also continue into 2010. The emphasis on the ‘green economy’,
particularly by World governments, has kept this issue firmly in the spotlight. And will continue to do so.
Elsewhere, HMRC are expected to cope with the country’s large budget deficit by increasing tax take. The return to a 17.5% VAT rate was an additional
burden on businesses, and with the possibility of longer-term tax reforms brought about by the general election all organisations should remain up-to-date
to ensure they can prepare early for changes. HMRC’s
increasingly aggressive stance on litigation – seen by some as a possible threat to corporate reputation –
has been cited as another method for increasing tax take.
On the back of the MPs expenses scandal, there’s also likely to be increased financial scrutiny in both the public and private sectors, and company
accountability may become a significant issue as audit openness is encouraged and required. Businesses should ensure they maintain comprehensive audit trails
that will stand up to this intense scrutiny.
Access will be commenting on many of these issues and providing further information throughout the year, via its blog, press release and industry news section.
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