The outlook for the small business landscape is mixed. Uncertainty about current challenges and what lies ahead continues to linger. However, we heard from self-employed individuals that they’re cautiously hopeful about their future in 2022 – especially if you make it your priority not only to survive but thrive!

What might this new year have waiting within its pages? Let’s look at some predictions based on recent news stories or studies conducted over the past few months.

1. Will there be more focus on wellbeing?

In April 2021, small business owners were optimistic about what the future holds. Despite renewed uncertainty, 2022 has the potential to continue the UK’s recovery — and bring with it a greater focus on wellbeing.

Here’s what the self-employed have said about last year and the future of their business:

The majority (38%) felt confident about their businesses ability to adapt and thrive under new conditions, but 36% were optimistic. 31% thought that because it is hard to predict what will happen with the economy in general or even specific changes such as trade agreements

The more experience an entrepreneur has, the easier they can predict future economic conditions. Experienced entrepreneurs believed there would be improved prospects of business growth mainly due to increased stability within key industries like healthcare which have seen significant advancements recently; however, this optimism wasn’t shared amongst newer firms who see change constantly threaten existing ways of doing things.

2. Will customers boycott businesses that don’t accept cash?

The recent Covid-19 restrictions have caused quite a stir in the UK. With calls for a complete ban on cash payments before we’re ready, Which? and The Telegraph Money campaigns tried to highlight how going “cashless” is not without its flaws.

In a world where people are increasingly relying on digital payments, it is essential to provide access and availability for cash.

The recent pandemic has accelerated the shift to a cashless society, which may leave some vulnerable customers behind. This was already evident in 2022 when it became more prominent than ever before.

3. Will there be more grants available to help businesses recover?

Small businesses still feel the effects of government financial help during coronavirus, with 81% believing they haven’t had enough support.

However, it seems that this will be changing soon as available resources wind down regardless, and many look forward to receiving further grants or funding in 2022.

4. Will savvy entrepreneurs make additional income?

The number of people running their own small businesses in the UK is steadily rising. The Simply Business research from November 2021 revealed that more than one-third (35%) plan to set up an additional income-generating enterprise next year, while 29% already do so!

In light of recent restrictions on coronavirus, many businesses have seen a surge in outdoor market traders and caterers. The increase is likely due to them adapting their strategies in anticipation of the change that would come with this virus’s reimposition across Europe after 2020-2021.

5. What tax changes are coming?

Fearful that the government will ask for more money, many are worried about what changes they’ll make. 2021 is almost here, and it’s time to prepare.

Higher Rate Income Tax (HRI), National Insurance contributions made by an employee or Self Assessment Duty could affect businesses financially depending on their profit status – which means higher taxes overall.

The government is freezing the amount you can earn tax-free at £12,570 until 2025. National Insurance and dividend taxes will increase by 1 quarter-point from April 2022 with a 50% discount on business rates for retail businesses in England who submit their returns late as a new penalty points system that comes into force this year.

There’s also a VAT customer compliance event scheduled just before next December, which may affect small companies differently depending on how much HMRC owes them.

The deadline for filing your taxes is coming up! Make sure you don’t miss it because if there are any errors or omissions on this year’s return, then they’ll hold onto those funds until after 31 January 2022, when all outstanding tax debts have been settled.

A professional tone should be used throughout the entire statement so that readers can relate easily to what’s being said without feeling bored by long sentences filled with business jargon.

6. Will trading return to pre-pandemic levels?

Small businesses play a vital role in helping the UK recover from coronavirus. As we learn how best this disease affects us, our desire for small business never wavers, and it’s clear that these people have something unique on their hands when they come into contact with customers every day or run their own company, which can be challenging during times like these!

As such initiatives are announced soon enough, so keep up-to-date through your preferred communication channels as well here at TaxbackUK because you’re always more than welcome no matter what time of year comes around.

7. Will tipping laws change?

These aren’t set to change until late 2022 at the earliest, but the government has laid out its plans to overhaul tipping practices.

The government has announced plans to overhaul how we tip and pay our servers. Under these proposals, all tips go directly into staff members’ pockets which means card payments or cash left on the table will be protected by law.

Here’s more on the legislation:

  • Employers will be required to pass on tips to workers without any deductions
  • Astatutory code of practice will set out how tips should be distributed to demonstrate fairness and transparency
  • Employers should have a written policy on tips and record how they manage tips
  • Employers should have a written policy on tips and record how they manage tips
  • Rights for workers to request information about an employer’s tipping record — this will enable employees to bring credible claims to an Employment Tribunal
Helen Preece
Helen Preece

Helen Preece runs The Financial Management Centre in Brighton. Helen is a CIMA qualified accountant with over 15 years of accountancy and bookkeeping experience. Having previously worked in audit, practice and industry she feels she has varied experience that can be applied to all clients. Helen understands that for small business the finance and bookkeeping side is not normally the first thing on the business owners ‘To Do’ list.