The Recession and the Tax office.

With a Global pandemic still lingering around the rate of consumer consumption is slowly rising, but we aren’t out of the woods yet.


With an all time low of employment we find our self’s looking for work or struggling to afford day to day expenses.

So what is the Ominous recession?

Well simply put its an effect on the economy, where the rate of production and consumption drops… we aren’t making the same amounts of products or consuming and trading the same as previous years. Creating a drop that effects the cost of living and finding jobs… amongst other concerning issues.

How do we know if we are in a recession? Well economist will predict a recession by considering these factors:

  • Consumers spend less,

because the loss of jobs and such affect how mush money we all earn it also affects how much we spend and the lack of spending will actually cause the drop (downward trend)

  • Stock prices drop,

now with the lack of income people are selling out their stocks which causes the stock market to drop, due to people not buying in at higher prices… even though the stock market is a consistent wave of rising and dropping its not a definite indicator


  • Credit card debt will increase,

More of us will be taking out money to cover our expenses, and due to the covering of debt we aren’t paying that money back quickly hence causing more of a decline


  • Manufacturing slows down

Basically if no one wants to buy extra products other than the essentials then the supply drops, as there is no demand. Why is this a factor, well it indicates that people aren’t spending (their own money) and causing companies to shut down productions causing a cut of jobs.

  • Interest rates aren’t consistent

The interest rates are directly connected to the resurve bank which buys and sells bonds, if the economy is dropping than the rate at which the banks buy and or sell the government bonds will also fluctuate, do to the changes in debt directly connected to the government.

  • Inflation rises,

Basically the costs of expenses go up, like goods and services… which in tern leads to less spending

  • Turnover rates drop,

Basically when there isn’t much security in your life your more likely to hold onto your current job that provides that support.

  • Unemployment increases,

Well more people will be losing their jobs due to extra costs that companies will experience, and finding jobs will become harder, which are signs of a recession

  • Temporary employment dwindles,

In a good economic situation employees may higher more people to fill in, which is temporary employment. When in a recession these people in the “temporary employment” are usually the first to go as it cuts costs.

How does this affect me?

Looking for jobs becomes harder… as less and less companies are hiring and more people are losing their jobs as companies cuts costs.

This will also affect day to day shopping as you have less money to spend the costs of living go up… which means your forced to budget and cut your own costs, which could include taking out a loan, or selling shares.

Because the recession is based off an economic flow, which is caused by the whole of society making similar if not the same choices, being acted out by millions of people (consumers) causing a whole system crash.

How will this affect my tax return?