Predictions and dreams in 2022by
Who knows what is coming in 2022? The Imprudent Accountant looks forward to a great year and some real surprises.
New Year’s resolutions are so passé. Instead, I thought that it might be more amusing to list some dreams and predictions for 2022. I leave readers to decide for themselves which are dreams and which predictions.
Boris Johnson and the more extreme wing of his party prove to be correct so that by April coronavirus restrictions have been lifted, hospitals are eating into their backlogs and every accountancy practice has reinstituted five-day weeks in packed offices.
In recognition of his wondrous achievement, the Prime Minister calls a snap general election and a grateful country recognises his prowess by giving the Conservatives a 500 seat Parliamentary majority and, by acclaim, electing Johnson as Prime Minister for life.
Following worrying signs in late 2021, to the point where even the Bank of England felt obliged to increase its base rate, earlier predictions proved to be accurate.
Although inflation will hit 7% in the early months of 2022, this turns out to be a short-term blip and by the autumn it will drop to just over 2%. This ensures that the housing market becomes stronger than ever, so that even recently qualified accountants find themselves struggling to hit the first rung on the ladder.
The recruitment market remains tough throughout 2022, with every chance of shortages of talented staff continuing into the foreseeable future.
After the inevitable pandemic downturn and bearing in mind staff shortages across the accountancy industry something has to give. On the plus side, since clients begin to recognise green shoots as the pandemic wanes, canny accountants swiftly translate this into higher fees. As a result, heaven be blessed, 5% pay hikes across the board with many top performers receiving twice that become the industry norm.
After the country is effectively put into lockdown through the first three months of 2022, a very slow recovery commences but working from home remain standard practice in the profession.
This means that almost every accountant spends the majority of 2022 operating from his or her home office, although there is a brief hiatus in the autumn when some start to allow employees to visit dusty offices approximately 50% of the time.
in 2021, Rishi Sunak had instituted tax rises to ensure that the UK would have its highest effective rates in half a century. However, thanks to the Omicron variant of coronavirus and the ensuing economic downturn, a snap Spring Budget will become a necessity.
In this, the Chancellor ostensibly freezes taxes and desperately tries to cut expenditure while appearing to increase it. The Chancellor does push through a series of relatively stealthy tax increases that primarily hit the lower paid. Pleasingly for the better off, inheritance tax, capital gains tax and higher rates of income tax will all be frozen, with additional reliefs slipped in by the back door.
Tax evasion and avoidance
In an effort to recover much of the money that had been frittered away due to lax controls around coronavirus loans, furlough etc., a newly empowered HMRC team will go on to the offensive, recovering billions.
At the same time, to annoy fractious accountants, a controversial Supreme Court decision sets a precedent that abusive tax avoidance indisputably constitutes tax evasion. It also extends this definition to cover all forms of avoidance that attempt to exploit supposed loopholes in particular when legislation is interpreted in a manner that “the average person” would regard as unreasonable.
Before being laid to rest, the Financial Reporting Council (FRC) carries out one final set of reviews of major auditors. It confirms that every single audit checked was materially accurate and efficient.
Although no accountant would dream of referring to their Recovery Department using language that might be in any way meaningful, that ceases to be an issue in 2022.
The reason is that no businesses fail, thanks to the economic boom that ensues after Prime Minister for life Johnson summarily puts an end to the pandemic from a friend’s island in the Caribbean over his Easter working holiday.