How can businesses and individuals best manage the inflation increases?

Inflation hit a record 40-year high in June, sitting at 9.1% - a figure that we haven’t seen since the days of Margaret Thatcher. This astronomical figure has left both individuals and businesses rapidly treading water to stay afloat, and we may not be over the worst of it quite yet. By the end of the year, economists predict that we’ll see inflation hit double figures with food, energy and fuel prices continuing to creep up to unfathomable heights. In such turbulent times, it comes as no surprise that businesses and individuals alike are incredibly worried about the current financial squeeze, and the tightening of that squeeze in the coming months. While there’s no way to completely eradicate these concerns, there are a few things within our power that we can do to help lessen the worry and manage the situation to the best of our control. Keep a close eye on finances It may sound incredibly simple, but ensuring you have a clear understanding of your financial situation is imperative; this goes for both businesses and individuals. Whether you’re looking at your business’s cashflow and budget situation or getting a better grasp over your own personal spending; knowing exactly what’s coming in and going out each month enables you to best prepare for those tighter months, avoid any unnecessary debt and understand where there is potential to save money, too. Additionally, ensure to review any current loans you may have. Without a shadow of a doubt, the cost of borrowing is going to increase over the coming months and so, if you can look to tie any borrowing in for a fixed term at a lower rate, now is the time to do so. Take the time to shop around In the current market, it can be tempting to just believe that everything is going to be expensive, so there’s no point taking heed and reviewing all options available to you. While yes, you may be hard pressed to find any services at similar rates to those seen only a few months ago, there will be some companies looking to remain competitive. Ensure you take the time to consider your options with suppliers and find the best deal for you. Make the most of current schemes and benefits Both individuals and businesses can find a variety of schemes on offer that are designed to give financial support. For example, for businesses, Research and Development (R&D) tax relief is designed to give companies financial relief if they undertake innovation projects. Eligibility can see small companies receive as much as 130% tax deduction, and those eligible needn’t be making profit to receive relief. While the scheme is not as generous for larger companies, they can still expect to receive 10% of their spend back. Working individuals can also look to their companies for financial support in a way that may be beneficial for both parties through tax-free benefits. This includes childcare vouchers, canteen services in the office, fuel allowance and uniform allowance. Ensure to also explore personal options that may be available to you. For example, check that you received automatic pay-puts form the Government, such as the Council Tax Rebate of £150 for those living in bands A-D. Also explore whether you may be eligible for other support schemes such as the Cost-of-Living Payment, Cold Weather Payments, childcare support, and housing support. There’s no denying that the next few months are going to continue to be difficult and for many, it’s going to be an anxiety-inducing time. There will be many aspects that we cannot control but, some that we can. It’s the aspects that we can control that will be most important to consistently review and tweak to make the next economic phase as bearable as it can be. If you are concerned about your business, yourself or a loved one, ensure to speak to a business advisor and financial professional who can look at the best options to ensure you are supported. By Clare Bowen, director for Monahans