, Reckoning With Risk

Hello, everyone, and welcome to another Enso newsletter.

Is it February already? It’s said that time passing quickly is an indication of advancing age. I’m not sure about that, as I’m not that old. But I still think 2024 will whizz by because, as I outlined last month, it’s got so much in store.

Talking of time, maybe you noticed the Armageddon clock for 2024 is at 90 seconds to midnight. We’re a minute and a half away from game-over. It’s a sobering thought in these febrile times, but I think it’s worth exploring what’s actually in the risk pipeline for everyone, especially businesses. It’s a challenging task with so many moving parts and such unpredictability. The best we can do is have a working knowledge of these things and do what we can to offset or mitigate them as the year progresses.

OK, hold onto your hats, and let’s get into it.

The 2024 Allianz Risk Barometer

Many commentators give their accounts of the coming year, so you’ll always find different views. Still, this report from Allianz summarises the 2024 global risk profile based on the opinions of 3069 respondents from 96 countries, so it’s probably not far from the mark.

The first thing that struck me was how much of this stuff has already happened this year. The report had only just cooled from the printer, and much of what it says is already happening, and it’s only February!

Cyber Threats

In 2024, the Allianz Risk Barometer puts cyber incidents and IT disruptions as the top worry for companies worldwide.

Respondents stated data breaches and ransomware attacks are of prime concern. Cybercriminals’ deployment of new technologies, such as generative AI, is a significant challenge as it’s difficult to mitigate the risks effectively. SME businesses are particularly disadvantaged due to their limited resources and are, therefore, more susceptible to cyber threats.

If this issue isn’t high on your list, consider this: In 2023, 8,214,886,660 global digital records were breached. While you might have scrupulous data security, even global brands, including X (formerly known as Twitter), have succumbed to attacks. And get this: the 2023 ‘data breach winner’ was UK cyber security firm Dark Beam, which lost over 3,800,000,000 records! That’s ‘world-beating’ Britain for you, right there!

Supply Chain Disruption 

Business interruption remains the second most significant risk, reflecting the complexity of global supply chains and the need for uninterrupted and just-in-time deliveries. Despite some loosening of the supply chain in 2023, potential bottlenecks remain. As we have seen, attacks from Houthi Rebels on freight vessels in the Red Sea and the full implementation of Brexit border checks this month are already affecting supply chains.

Mother Nature

Natural catastrophes are rising, driven by record-breaking events such as severe thunderstorms and wildfires in 2023. Climate change is unpredictable, and the frequency and severity of these events pose challenges to industries like utilities, energy, and transport infrastructure. Just look at how many disruptive weather events have hit the UK in 2024. We’ve just had Storm Henk, and, as I keep saying, it’s only February.

Political Unrest

Political risks and violence have also increased, fuelled by ongoing conflicts and geopolitical tensions. Social media-driven disinformation and economic uncertainty are pushing people to extreme ideologies that could further complicate the business environment. We’ll know more about these effects as the 2024 polling year continues, especially in November when the US presidential race concludes.

The Global Economy 

While economic stability remains a concern, with modest growth projections globally and the potential for calmer waters (depending on election outcomes in 2024), it’s not all bad news. Expectations of lower inflation rates offer some optimism, allowing central banks flexibility in adjusting interest rates to stimulate economic activity.

Skilled Worker Shortages 

The shortage of skilled workers remains critical in certain regions, particularly Central and Eastern Europe, the UK, and Australia. The growing demand for IT and data experts shows the need for skilled professionals to address cybersecurity challenges and safeguard business operations. Of course, hospitality, healthcare, and farming must also fill vacancies to provide vital pro-growth economic services.

The point to remember here is that although these are global trends, they can and will profoundly affect even small UK businesses as the impacts filter down. No enterprise is immune, so plan as best you can, and if you need help, call me for some advice.

You can download the full Allianz report here if you want more details.

Get Minted On Vinted?

I mentioned the so-called ‘Vinted Tax’ last month, which generated quite a lot of heat when it hit the news cycle. However, as with most tax legislation, it’s complex, nuanced and, inevitably, confusing. So, to help you, here’s more clarification of the rules that show they might not be as drastic as first thought.

If you sell your own stuff, like old clothes or electronics, you usually don’t have to pay tax on the proceeds. As HMRC states, “You do not need to pay income tax on selling your items, such as used clothes, an old TV, or unwanted furniture.”

However, if you sell something more valuable for £6,000 or more, you might need to pay tax on your profit.

If you regularly buy or make things to sell for profit and consistently put them online for more than the cost of the item, the taxman might consider you’re running a business, and you’ll have to pay tax on profits above £1,000.

These new rules, then, are aimed at ongoing online traders. If you sell a lot online, platforms must tell the tax office if you’ve sold 30 items or earned over £1,725. This helps the government keep track of online sellers’ earnings. Don’t forget that platforms must start sharing this information in January 2025, so make appropriate arrangements regarding your ‘seller status’.

Still clear as mud? Then consult HMRC or a finance professional for additional guidance (I would say that, wouldn’t I!).

, Reckoning With Risk

Even Time Changes In A Leap Year 

Finally, after all that heavy stuff, I thought some light relief would be in order. So, let’s look at the four-year phenomenon we call the Leap Year, which just happens to be 2024.

This quirky little hiccup in our regular 365-day calendar keeps us aligned with the planets. You see, it takes the Earth 365 ¼ days to do its annual spin around the sun, but having one-fourth of a day each year would be a faff, so instead, we toss in an extra day every four years.

But Leap Years are even more fascinating than planetary maths. They come with strange traditions and horological quirks, so let’s look.

Did you know during a Leap Year, January, April, and July all kick off on the same weekday, which in 2024 is a Monday? How useful for them to be on the first day of the working week (not)!

Did you do dry January? Yes! Then why not celebrate your achievement with the Leap Year Cocktail, concocted in 1928? It’s a Martini variant consisting of Gin, sweet vermouth, and a dash of Grand Marnier. I don’t think it’s obligatory to have this potion only in a Leap Year, so bottoms up if it’s to your taste (this or any year)!

Then there are the ‘leaplings,’ those rare souls born on February 29th. They’re doomed to spend their lives pretending their birthdays are either on February 28th or March 1st in non-Leap Years. At least in 2024, they can blow out their candles on the correct day for a change. Famous leaplings joining them include singer Ja Rule, motivational speaker Tony Robbins, and even Superman, all of whom were born on this auspicious day.

For those who have been avoiding ‘jumping the broom,’ there’s an age-old tradition of women proposing to men at Leap Year. Your marriage avoidance tactics may be dead in the water on 29/2/24. So, if your partner gets on one knee at the end of February, it could be life-changing. Let me be the first to congratulate you!

So, here’s to Leap Years, where we bend the rules, cocktails flow, and the wedding count goes up a few notches. It’s an extra day of chaos and celebration that only a Leap Year can bring!

OK, that’s it for this month. Lots of food for thought there, and I’ll say it again: it’s only February!

All the best


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