1.5.4 The economy and business
The impact of the economic climate on businesses:
● unemployment, changing levels of consumer income, inflation, changes in interest rates, government taxation, changes in exchange rates.
● unemployment, changing levels of consumer income, inflation, changes in interest rates, government taxation, changes in exchange rates.
GDP & Unemployment
How might these two videos be linked?
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The Credit Crunch Explained
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UK high street closures
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What is meant by GDP?
How is it related to unemployment?
Why would this data be important for businesses?
How can a business protect itself from a recession?
How is it related to unemployment?
Why would this data be important for businesses?
How can a business protect itself from a recession?
Inflation
What is meant by inflation?
What impacts could inflation have for businesses? Hint - what do you think is meant by good and bad inflation?
What impacts could inflation have for businesses? Hint - what do you think is meant by good and bad inflation?
What actions are avilable to a business to respond to inflation?
What might be some of the negative consequences of such an action?
What might be some of the negative consequences of such an action?
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Toblerone changed the shape of its chocolate bars so now everyone gets less chocolate - TomoNews
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The Gigantic Grocery Warehouses Built like Living Organisms
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Interest Rates
What is meant by interest rates? What are the two things you can do at a bank which are influenced by interest rates?
How will changes in the interest rate influence a business possible directly on indirectly?
How will changes in the interest rate influence a business possible directly on indirectly?
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What does the interest rate rise tell us about the health of the economy? - BBC Newsnight
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Government Tax
There are 3 main types of tax in the UK - do you know what they are?
How will this influence businesses?
How will this influence businesses?
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Calculate the income tax the average person would pay?
What income tax would you need to pay for your dream job? 
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VATWhat is it?
Why is it important to a business? A Cake or a Biscuit? - The Lengthy and Expensive Saga of the Jaffa Cake
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Industry chiefs fear hundreds of fryers up and down the country may have had their chips if a hard-fought battle to scrap the current 20% level of tax is unsuccessful.
There have already been two failed attempts in British courts to win a zero VAT rating for fish suppers. Now accountancy firm KPMG, which is helping chippie owners, is set to take the fight to the European courts. Their pledge comes almost two years after Chancellor George Osborne ditched plans for 20% VAT on freshly baked pies and sausage rolls. Andrew Crook, secretary of the National Federation of Fish Friers (NFFF), said: “We have a protective claim going through KPMG, which is purely for takeaways. “They are trying to get VAT reduced to the lowest level. “The claim has been in court twice and has been refused so far, so it is going to be put to Europe.” The federation argues it should be exempt, in line with supermarkets, which do not pay VAT on some of the hot food they sell. At present, VAT makes up 99p of every £4.95 fish supper sold at Mr Crook’s two family-run chippies in Lancashire. He and other owners claim they could slash the cost of their food if they didn’t have to pay VAT. He said: “Every quarter it is a struggle. The Government claim that we are collecting it and adding it on to our prices. But the reality is that we are absorbing it because customers will only pay so much for their fish and chips. https://www.sundaypost.com/news/uk-news/tax-fight-for-battered-chip-shop-owners/ |
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Business RatesBusinesses getting screwed over with business rates (02Aug17)
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Business rates are charged on most non-domestic properties, like:
Your local council will send you a business rates bill in February or March each year. This is for the following tax year. Example Barbara has a business in England. The rateable value of her business is £10,000, so she uses the 2019 to 2020 small business multiplier (49.1p) to estimate her business rates as follows: £10,000 (rateable value) x £0.491p (multiplier) = £4,910 (basic business rates) https://www.gov.uk/introduction-to-business-rates |
Counter balance
How can a business benefit from the Government collecting tax or reduce the effects of tax?
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How the government spends your money | BBC Newsbeat
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How does Nando's avoid paying tax in the UK? | Guardian Animations
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Exchange Rates
What is an exchange rate?
Does anyone know what has recently happened to the pound?
Key method to help with analysis = SPICED
Does anyone know what has recently happened to the pound?
Key method to help with analysis = SPICED
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Activity: Exchange rates sheet
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UK: Pound drops to 31-year low against dollar on Brexit fears
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TRAILER: Dispatches: Supermarkets: Brexit & Your Shrinking Shop
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