Opportunities and threats

STEVE MUNCEY and colleagues at the East Anglian office of KPMG look at why reasons for optimism and concern in 2011 seem equally balanced

Steve Muncey, senior partner

ANNOUNCEMENTS around spending cuts and tax increases, combined with on-off speculation as to whether we are heading for double dip recession, has definitely had an impact on business behaviour.

We know from talking to our clients that for many, growth plans and “getting back to business” is still on the agenda.

Most have created balance sheet and operational flexibility. However, all are still wary and are both ready to invest or batten down the hatches, whichever is required.


You may also want to watch:


Steve Elsigood – Lending

BANKING conditions will remain challenging and we anticipate a high volume of refinancing activity in the next 24 months as loans arranged pre- “credit crunch” must be refinanced ahead of maturity.

Most Read

The Bank of England’s credit conditions survey for the fourth quarter of 2010 reveals that only companies with the best credit quality can rely on the improved bank lending environment. Some bank lenders are shifting from rebuilding their balance sheets to growing their lending but this is not the case for the whole bank lender community.

Helen Sant – Taxing times

2011 will see a number of changes coming in to the tax system, so keeping on top of these will be key.

On the plus side, the small companies’ Corporation Tax rate will reduce to 20% from April 1. The Finance Bill included a number of other measures which will simplify the position for businesses, as well as extending the availability of the exemption which allows companies to sell parts of their business free of Corporation Tax.

However, new rules unveiled in December around the tax and national insurance treatment of arrangements involving employee benefit trusts and unregistered pension plans will also be effective from April 6, with anti-forestalling provisions applying so that various transactions will be impacted from December 9, 2010.

Steph Beavis – Public sector cuts

THERE is no doubt that the changes taking place within the public sector will have an impact upon local businesses. Yet it is up to them to turn what could be a threat into a success story.

Those who currently supply to the public sector have an opportunity to re-engineer their method of delivery, and those that are quick to adapt could see themselves in a strong position.

On the flip side is the fear that cuts will negatively impact upon the private sector. Certainly, for those businesses that are heavily reliant upon the public sector, absorbing a reduction in spend could quickly lead to cash flow problems.

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter
Comments powered by Disqus