Newsletter 22nd August 2022

As Costs Rise, Consumer Confidence Plummets

Consumer confidence in the future reached a new low in August due to rising living costs and a poor economic outlook. According to GfK's Consumer Confidence Index, the most significant cause of the drop was a "sense of frustration" with the economy.

According to the Office for National Statistics, retail sales volumes decreased 1.2% in the three months to July and increased by 0.3% in July after falling slightly in June but remain below pre-covid levels. According to ONS data, sales have declined since the summer of 2021.

The Bank of England now expects the UK economy to enter a recession later this year, with the downturn lasting 15 months. Inflation, which measures the pace at which prices fluctuate, reached 10.1% in July and is predicted to exceed 13% this year.

According to the most recent data, clothing shop sales volumes declined by 1.2% in July, owing mostly to declines in furniture and lighting retailers. Consumers are reducing their spending due to "increased prices and affordability concerns," according to the ONS.

The cost-of-living problem is straining people's finances as income fails to keep up. Higher gasoline, energy, and food costs are driving the crisis.

UK Vacancies Decline for the First Time in Two Years

Official figures show that the number of vacancies in England has declined for the first time in two years.

There were 1.274 million job openings in the May-July quarter, a reduction of 19,800, the first drop since June-August 2020. Since then, the number of unfilled positions has increased by 945,000 as firms rush to employ workers.

Earlier this year, vacancies outweighed unemployment for the first time, but the two ratios have now been reverted to balance.

The ONS reported that the unemployment rate rose from 0.1% to 3.8% in the third quarter, suggesting that the post-Covid labour market may be relaxing. Still, it will also raise concerns that businesses will reduce workers if the economy declines.

Many London businesses still struggle to recruit staff, especially in hospitality, tech, and aviation, where shortages caused turmoil at airports throughout the summer.

Because of Brexit and the pandemic, 196,000 overseas employees have departed the hotel industry. According to a recent survey, immigration laws discourage 89% of businesses from employing abroad. Over a quarter of hospitality firms are sceptical about the sponsorships process.

However, according to the news wire Bloomberg, tech giant Apple announced that the global employment market is shrinking, clearly showing the layoff of 100 recruiting contractors.

Tax Return Appeals Guide

?HMRC might have sent you a letter saying they are reviewing your self-assessment or Corporation Tax returns and have altered your numbers so that you owe more tax. This change is right 99 times out of 100, but you need to let them know the first time it's not, so you don't get charged too much.

?Most tax appeals deal with the following:

• Your tax bill (EG Income Tax, Corporation Tax,?VAT)
• A claim for tax relief
• A request for information or to check your business records
• A penalty?(for example, if you paid your tax late or filed your tax return late)

The letter from HMRC will tell you if you can appeal their original decision. If you aren't sure about the decision, you can get help from HM Revenue and Customs (HMRC) or an experienced tax expert. We have put together a guide that gives an overview of the appeals process, which includes appealing to the independent tax tribunal on your behalf.

What is a Benefit in Kind?

?A benefit in kind (also known as a perk) is anything of value an employer provides to an employee or finance director in addition to the usual financial compensation.

?You won't be surprised to find out that different types of benefits in kind (BIK) have different tax implications. There is a wide variety of in-kind benefits; some are taxable, while others are not, leaving a bit of a messy middle ground!

?Our blog?explains?what constitutes a benefit in kind, which benefits an employer is eligible to claim on behalf of an employee, and how employers should report these benefits to the HMRC.