{"id":21322,"date":"2025-04-17T18:29:52","date_gmt":"2025-04-17T17:29:52","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/partners-blog\/?p=21322"},"modified":"2025-04-17T17:29:56","modified_gmt":"2025-04-17T17:29:56","slug":"budgeting-in-2025-what-challenges-does-your-business-face","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/partners-blog\/budgeting-in-2025-what-challenges-does-your-business-face\/","title":{"rendered":"Budgeting in 2025: What challenges does your business face?"},"content":{"rendered":"

\"\"<\/a><\/p>\n

After a markedly lacklustre Spring Statement, you may find yourself concerned for the economic future of your business.<\/p>\n

<\/p>\n

While the Government continue to uphold the pledge to not directly increase taxes, there are a number of measures that have been introduced that may end up costing your business more.<\/p>\n

Effective budgeting can help your business stay competitive whatever the economic climate.<\/p>\n

Yet to understand how to budget, it is imperative to understand the impact of inflation and other economic factors on your business.<\/p>\n

Impact of inflation<\/strong><\/h3>\n

As of February 2025, the UK\u2019s Consumer Price Index (CPI) inflation rate was listed at 2.8 per cent.<\/p>\n

While this is an improvement on the three per cent observed the month before, it is still significantly higher than the Bank of England\u2019s desired two per cent inflation rate.<\/p>\n

This will result in the cost of items and services remaining high across the board.<\/p>\n

Welfare cuts<\/strong><\/h3>\n

While it might not be immediately apparent how the recent cutting of welfare benefits will affect your business, it is worth a closer examination.<\/p>\n

The Government\u2019s own impact assessment has noted that an additional 250,000 people will be pushed into poverty by these changes.<\/p>\n

This would directly correlate to a reduction in disposable income for an increasing number of the population.<\/p>\n

When the population has less disposable income, they are less likely to spend money on luxuries and non-essential items.<\/p>\n

Even essential items may face additional scrutiny as customers are forced to become savvier with their spending.<\/p>\n

If your business typically caters to a customer base consisting of those on lower incomes, it may be worth considering how a potential reduction in revenue will impact you.<\/p>\n

National Minimum Wage Increase<\/strong><\/h3>\n

By now, you will have discovered whether or not the increase in the National Minimum Wage and the National Living Wage will directly affect your business.<\/p>\n

Although the new rates have now been implemented, it is still worth monitoring your payroll processes to ensure that any increased wage costs are considered.<\/p>\n

This will be of particular relevance to any employer who hires young people.<\/p>\n

When an employee turns 18 or 21, they should be moved to a higher wage.<\/p>\n

Failure to accommodate this would render your business non-compliant while failure to account for this may cause you problems later on.<\/p>\n

Knowing the ages of your workers can help you to plan for any future increases in wages.<\/p>\n

As the rates tend to increase every year, it is particularly important to plan ahead for any worker who ages into a higher bracket towards the end of the tax year.<\/p>\n

National Insurance Contributions<\/strong><\/h3>\n

While workers have been shielded from increases in Income Tax and National Insurance (NI), employers have not.<\/p>\n

The previous rate at which you paid NI was 13.8 per cent on employee\u2019s earnings above the \u00a39,100 threshold.<\/p>\n

This new tax year brings with it a significant increase to the amount of NI you will be paying for your employees.<\/p>\n

This is due to you now having to pay 15 per cent on employee\u2019s earnings above the new threshold of \u00a35,000.<\/p>\n

While you will likely have already made adjustments to accommodate for these changes, it is worth considering how they will impact your business long term.<\/p>\n

Unlike with the increased National Minimum Wage, this change will be felt by all business owners.<\/p>\n

However, if you are also impacted by the increase in National Minimum Wage, then the elevated employee costs need to be carefully considered to ensure that your business continues to grow.<\/p>\n

Tariffs and Trade Wars<\/strong><\/h3>\n

Without going too much into the current political climate, it is an inescapable fact that global trade relations are increasingly strained.<\/p>\n

If your business is reliant on imports and exports, it is worth considering how tariffs might negatively impact the flow of your commerce.<\/p>\n

As the nature of tariffs is continually in flux, it would benefit those who may be impacted to keep a close eye on how things unfold both in the short term and the long term.<\/p>\n

If you feel you may be affected by tariffs, a consideration of different suppliers may help alleviate some of the costs.<\/p>\n

Importantly though, leaving extra room in your budget for higher import and export costs will allow you to continue to operate with efficiency.<\/p>\n

Recession<\/strong><\/h3>\n

At present, a full-scale recession is not predicted for the UK.<\/p>\n

This is largely based on the economic policies of the Government having the intended impact.<\/p>\n

Still, the economy is experiencing notable volatile as external forces drive up prices globally.<\/p>\n

Global conflict and natural disasters have both caused some volatility in global economics in recent years.<\/p>\n

These factors are harder to account for, but continual, effective budgeting can help your business stay competitive regardless of what comes your way.<\/p>\n

Budgeting strategies with Moore Thompson<\/strong><\/h3>\n

At Moore Thompson, we have a strong track record of helping business budget effectively.<\/p>\n

We can work closely with you to assess your business plans and draw your focus to the likely challenges that may await you in the future.<\/p>\n

By reviewing your financial position, we can help you draw up effective strategies to keep costs down and profits up.<\/p>\n

Our expert team can also help you secure additional funding, such as through grant applications, which may further help with easing budgeting concerns.<\/p>\n

If you want to stay financially agile in an ever-challenging world then contact us today for expert advice and guidance.<\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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