The dividend tax and NIC hike of 1.25% have hit the tax and accounting aspect of many employees, small business owners, and self-employed.
As a matter of fact, one employee’s living wage would cost an extra 200 Euros per year, and if the number of employees is considerable, the sum would add up to a hefty sum.
But panicking isn’t a solution; looking for a solution is! A response from the employers hold major importance. A possibility of cutting on recruitment to enable savings is a predictable reaction apart from an active attempt to minimize wage bills with a motive to reduce redundancy.
An Overview
According to a report published by LSE, a warning of million jobs at risk and shutting down of every 1 in 16 businesses is a probability. While multinationals have minute to zero losses, small companies find themselves in a perilous state.
The decision of not hiring enough manpower and cutting on investments might do more harm than good. It might slow down the negative revenue numbers for the current timing, but when looked at from a wider perspective, it wouldn’t be beneficial on a long-term basis. The reaction from employees wouldn’t be great on being paid less with an increased workload. A constrictive work environment is likely to cause mental pressure. All of this would just lower the productivity level inside a workspace, increasing turnover and costs.
But, getting engaged in work activities with employees and looking for solutions might bring the proper functionality back on track.
Let’s simplify the solutions for you a bit:
Salary Sacrifice
Decreasing the employees’ salary for a while and increasing their pension scheme might sound good for some of them who would be happy with the deal. This would free them from Income tax and NIC.
Keeping a regular change on updates
Government policies are always changing. There might be an additional set of changes coming up as support schemes for various sectors of the economy. Being updated on them can help initiate policies on time.
Management accounts
Major businesses suffer from failed cash flow statements that have a failed insight into managerial functions. Speaking to accounting experts and checking out the areas that need mending through the right planning and strategies can be beneficial.
FinBridge facilitates corporate accounting for small businesses through expert bookkeeping, payroll, compliance and all tax and accounting services. We ensure your small businesses succeed through our quality service and master strategies.