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  • Writer's pictureEdgar Rayo

Finanze Business Daily Digest - 14/11/2022

As with Finanze's Daily Digest, I will also be publishing daily news and opinions on the UK SME and Business sectors to help you stay ahead of your competitors by having up to date information to aid in your business planning.


The Brief: Days before the budget statement will be delivered, PM Rishi Sunak is under immense pressure to find new tax sources to fill the large gap in public finances. Bloomberg estimates that around £20 billion in taxes will be raised through freezing income tax thresholds and the energy windfall tax extension, while annual spending cuts will reach almost £35 billion.


Why It Matters: Small and medium enterprises are likely to get heavily hit by the tax measures that will be announced on November 17. Last week, business lobby groups including the Federation of Small Businesses, the Confederation of British Industry, and the Institute of Directors met with Sunak and raised their concerns on the impact of VAT on the threshold freeze since some small enterprises have already chosen to stop operations before they reach the £85,000 turnover threshold, according to a report by Financial Times.


Finanze Business Foresights: Thursday’s Autumn Statement is expected to outline a long list of measures that will hopefully restore the financial markets’ confidence. But the imminent tax burden will add more pressure to the plight of businesses as they continue avoiding their accounts being in the red. In June, Sunak was heavily criticised by business groups for his lack of support for struggling enterprises caught by the cost-of-living crisis, so he promised to bring tax cuts to the table. But now that he inherited the impact of the market turmoil from his predecessor, his initial plans will apparently be shelved as he needs to balance public spending and tax rises to avoid another downturn. Since many believe that the country is already in recession, Sunak must propose programs that will raise enterprise productivity swiftly and lift the UK out of prolonged uncertainty.


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