Today, the UK Government has announced its Budget for the year ahead. Notable spending plans include £435m in relief for firms affected by the increases in business rates, as well as a £300m hardship fund for the worst affected small businesses. There was also a planned reduction in the rate of Corporation Tax to 17 percent by 2020. These changes will have a significant impact on the financial planning of many UK businesses.
Rob Douglas, vice president of United Kingdom and Ireland for Adaptive Insights, the cloud-based financial planning specialist, offers the following comment on how UK businesses should manage these changes:
"Today's Budget announcement demonstrates exactly why it is important for UK businesses to actively plan for multiple scenarios. Given that this Budget intends to manage the transition of the United Kingdom out of the European Union, it was bound to make waves in the British economy for organisations of all sizes and across all industries. Whether a change in business rates or taxation is in the cards, creating 'what-if' scenarios where those changes can be modelled and planned for is the only way organisations can avoid being caught off guard.
"The most advanced finance teams provide strategic guidance to the business and are therefore likely to already have some insight into the impact of the new Budget. Identifying which factors could compromise corporate performance and which will drive profit for the business requires finance teams to take an active approach to planning—collaborating across the organisation to get financial and operational data in real-time. This empowers modern finance teams with a comprehensive view of the business in order to model the impact of the new Budget and advise the business accordingly.
"In a Q1 2016 CFO survey, 64 percent of CFOs stated they plan for multiple outcomes to prepare for changes in regulatory requirements, and we continue to see this across our customer base of customers using a cloud planning solution. Regulatory, market, and economic changes all impact the success of businesses and CFOs are increasingly embracing strategies to be prepared.
"As with any changing macroeconomic factor, the Budget brings both opportunities and challenges for UK businesses. My top tip is to look to the finance team to help identify which is which and to provide strategic guidance on maximising corporate performance under the new Budget."