Business predictions for 2021

by | Jan 5, 2021

We have to admit that this time last year we did not predict the Global Health Pandemic and nobody could have predicted the level of devastation that we have all endured. We did however predict Brexit disruption, and it looks like this will continue until systems and procedures are put in place to allow for smooth travel and trade.

Looking at 2021, we predict that there will be many “bumpy moments” for UK businesses and travellers as they get to grips with new EU rules.  This was also stated by Michael Gove at the end of last year.

The nature of the UK’s new relationship with the EU – outside the Single Market and Customs Union – means that there are practical and procedural changes that businesses and citizens will need to follow.

The Government continues to urge businesses to make sure they understand the new rules on importing and exporting goods, including the different rules that apply to trade with Northern Ireland, and to consider how they will make customs declarations on EU trade.

They also encourage travellers to EU destinations from 1 January to take out comprehensive travel insurance, check their mobile phone provider’s roaming charges and make sure they have at least six months left on their passports.

Manufacturing and sectors dependent on the movement of goods between the UK and EU will be most affected.  We do believe that our clients are resilient and will adapt to the changes and that the new regulations will be a short-term issue.

We predict that the lockdown, albeit nationally or in varying tiers, will continue to be in place for at least the first six months of 2021 and will only ease up when mass vaccinations have been done. This will impact hospitality, retail, personal services and travel businesses most. We expect many of these to “bounce back” later in the year.

The lockdown has altered consumer behaviour and we predict further retail evolution as a result. For example, it is reported that Amazon will expand its Go store chain into the UK with shops that do not have a checkout. Customers can collect the products they want and leave the store without a checkout process. A combination of digital cameras and artificial intelligence tracks what they have collected and invoices them when they leave the shop.

See:   https://www.bbc.co.uk/news/business-54507044

We also predict that working from home will become the “new normal” for many smaller service-based businesses. This offers reduced office costs and more flexibility.

New and enhanced “work from home” security and collaboration software will develop further next year, and we encourage our clients to review their internet security regularly.        

2021 will see many business adopt new technologies to help them streamline their administration. We predict most of our clients will move to Cloud accounting software ahead of the April 2022 “Making Tax Digital” deadline. Cloud accounting software has several advantages for business owners:

  1. A clear picture of your current financial position, in real-time;
  2. Your accounts 100% online, so there’s no software to install and everything is backed up automatically. Updates are free and instantly available;
  3. Your bank feeds your data directly into your accounts on a DAILY basis;
  4. You take a photo on your phone of a purchase invoice and it is posted automatically; and
  5. Could see your results, who owes you money, who you owe and your business bank balance 24/7, 365 from your smart phone, tablet or computer.  

If you have not yet done so please talk to us about moving your accounting system online ahead of the new legislation in 2022.

Tell us about your business

Explore where you want to go, what you need to get there and how ABG can help.