A4.2 Implications of Fiscal Constraints on an Organisation

 

Financial Constraints may take a number of different forms. All organisations have a number of general outgoings, including issues such as:

  • Tax (VAT)
  • Employee Costs
    • Staff wages
    • Employers National Insurance Constructions
    • Pension contributions
    • Healthcare schemes
    • Company car costs
  • Rent
  • Utility bills
  • Telecoms (phone lines & broadband)

 

In addition, there may be specific environmentally-related costs, including:

  • Waste Disposal Costs
  • IPPC Permit operating fees
  • Discharge consent fees
  • Abstraction Licence fees
  • Waste Exemption¬†charges
  • Packaging Compliance scheme fees
  • WEEE Compliance scheme fees
  • EMS Auditing fees
  • Costs to employ an environmental specialist or appoint an environmental consultant
  • The potential costs associated with an environmental prosecution, associated court costs and associated clean up costs

 

Not all costs are obvious. For example, utility bills now include a Climate Change Levy, whilst waste disposal costs may include Landfill Tax. In addition, new technology may be required to enable processes to be changed in light of current environmental requirements, such as a replacement for lead solder.

The implications of financial constraints are quite simple. An organisation must make money to stay in business. Increased outgoings reduce the available money to invest in new products and processes, employ competent staff or operate effectively. Ultimately, the management of financial constraints determine which organisations face liquidation.

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