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January 2024 News Update 

Your first news update of the year from Commercial Experts

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The News That Matters to You: Delivered by Commercial Experts

Welcome to the monthly news round up from Commercial Experts, where we tell you about the news that matters most to your business. We know you lead a bust life and aren't glued to the news. That's why we are; to help you keep on top of what's changing in the world of business. 

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December 2023 proved a microcosm of the year's economic rollercoaster. Interest rates and less disposable income led to decreased footfall in shops, which prompted many business owners to tighten their belts. Yet, amidst the caution, pockets of hope emerged. With inflation falling in the UK's economy, petrol prices getting cheaper for many, and early signs that interest rates might be due a drop, there are possible signs of encouragement.  This is a quick round up of the the business headlines that matter most to you and your business. 

Inflation Falls by More Than Expected in Year Leading to November

The latest figures show that prices rose by 3.9% in the year to November, down from 4.6% in October. Though fuel prices pushed the drop most, slowing price rises for food were also factors behind the fall.

The drop in inflation could indicate that the cost of living crisis, which we have been living with now for several months, might be slowly easing. However, while inflation is well down from its peak of over 10% in 2022, it is still almost double the Bank of England's 2% target.

Something else to remember is that falling inflation does not mean goods and services are cheaper, but rather prices are rising less quickly than they were. We'll probably be watching our pennies for a while longer. 

Central Banks Expected to Begin Cutting Interest Rates in 2024

Much of the UK press is predicting that central banks will begin to cut interest rates this year. We don't know anything for sure as it's all guesswork right now, and the prevalence of inflation in the UK's economy could mean interest rates remain at their current high levels for the foreseeable future. 

But with inflation on its way down and the economy showing early signs of steady recovery, the Bank of England might lower interest rates to give the economy a boost in the first half of 2024. 

More will become clear as fresh data emerges in the coming weeks and the Bank meets to discuss its next steps. 

Price of Petrol Falls to Lowest Level in More Than Two Years

December saw the average price of petrol at the pump fall to its lowest level for more than two years.

According to the RAC, a litre of unleaded petrol dropped to around £1.43 on average, a price which was last seen at UK stations in October 2021.

Despite the recent drop in price, many businesses are still keen to save fuel to make each drop go a bit further. You can do this by watching your speed (The RAC says 45-50 mph is the most efficient speed to drive for fuel efficiency) or switching off the air conditioning, which can increase your fuel consumption by up to 10%, according to the AA.

UK Government to Introduce New Rules to Cut Migration

December saw the UK government introduce measures to cut the number of immigrants entering the UK. The measures follow promises from ministers to get net migration down after levels rose to a record high.

The changes will mean foreign workers with a Health and Care Worker visa can no longer bring over their dependents with them. Further changes will increase the earning threshold for overseas workers by nearly 50%. 

Currently, most foreign workers need to earn at least £26,200 to come to the UK but, from next spring, the minimum will rise to £38,700. The move aims to encourage businesses to focus on the domestic workforce and reduce businesses' reliance on migrant workers. 

The changes might affect your business if you have plans to hire in 2024. It means that the job vacancy you advertise must now pay a lot more if you want to explore hiring from abroad. 

Tax Reform Incoming for Sole Traders and Partnerships

HMRC is changing the way they work out taxable profits. At the moment, unincorporated businesses are taxed on what's called a 'current year basis', but starting from the tax year 2024/25, the system will be changing to a 'tax year basis'.

The 2023 to 2024 tax year is known as the 'transition year', so in your Self Assessment tax return, you will need to report profit from the day after your accounting year ended in 2022 to 2023, up to 5 April 2024.

This means you will report profits covering more than one year, and you may need to apportion two sets of accounts to estimate your profits for the year. For more details, visit the Government's website

Save Money With Commercial Experts

Commercial Experts is here to help your business save money in as many areas as possible. From saving you money on waste disposal to cutting your costs on your energy bill, we're here to help. You'll have seen that there's new tax rules due to take affect. If you want to be free of the stress of working the new rules out, click the button below to find an accountant for your business. 

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