Outlook for 2013: Treat tax as another line on the P&L
Tony Medcalf, tax partner at Moore and Smalley, gives his outlook for 2013.
Despite the continuing economic headwinds, the labour market appears to be holding up pretty well with unemployment continuing to fall.
That said, I think that’s because the workforce has become pretty flexible over the last couple of years with many people willing to take what hours they can, and take less pay, to keep them in employment. I expect to see this trend continue in 2013.
I think we are perhaps seeing the impact of this with the continuing stagnation in the economy as people have less money to spend and therefore consumption continues to decline. Many people would argue that’s not necessarily a bad thing as it was an economy built largely on consumption, and funded by excessive borrowing, that got us here in the first place.
I think people and society is changing and I would expect the much more sensible approach to bank lending to continue for a few years to come, which means businesses could continue to struggle to access finance in 2013.
Businesses are always going to have to deal with tax issues, so they need to view tax as another line on their balance sheet and manage it like they would any other business cost. Businesses should work closely with their professional advisors to ensure any possible savings are being maximised.