Build !Build! Build! – business news 30 June 2020.
30 June 2020.
James Salmon, Operations Director.
Boris promises to Build the country into recovery, Leicester is shutdown, the WHO warns worse is to come, but markets are up, GDP fall figures, the government borrows more, Household hoard cash, taxes proposed on online deliveries, threat of redundancies, latest news on insolvencies and far more.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Covid-19 general news
Greece has said it will not allow any direct flights from the UK and Sweden until July 15th.
The Government has shutdown virus hotspot Leicester, closing non-essential shops and saying the loosening of restrictions elsewhere in the country on 4th July will not apply to the city.
We have hit the six month anniversary of the World Health Organization beconing aware of the novel coronavirus. At a briefing in Geneva, the WHO warned that the worst of the pandemic is still to come because of a lack of global solidarity.
Tedros Adhanom Ghebreyesus, head of the World Health Organization, said some countries are experiencing a resurgence of cases and half the deaths are coming from the Americas. “This virus can be suppressed and contained using the tools at hand,” and countries shouldn’t wait for a vaccine to deal with it, Tedros said, giving the examples of South Korea, Japan and Germany. “If any country is saying that contact-tracing is difficult, it is a lame excuse.”
Markets.
The FTSE 100 which started off Monday weak, strengthened over the course of the day closing up 66.5 points at 6225.8.
Boris Johnson today promised a “Rooseveltian” boost to Infrastructure spending to help Build! Build! Build! the country’s economy into a recovery from the covid-19 shock and said a return to austerity would be a mistake.
The PM said he would double down on his plans to increase investment and said his government – which has already announced emergency spending and tax measures worth an estimated £133 billion – would continue to help people and businesses.
In the US the S&P500 roe 1.47% and the NASDAQ rose 1.2% Stocks in Asia rose as Chinese PMIs came out ahead of expectations
UK GDP
UK GDP fell by 2.2% in the first quarter of 2020, its worst slump since 1979, data confirmed today. The figures were slightly worse than the Office for National Statistics’ initial estimate of the covid-19 pandemic lock down damage when it initially predicted a 2.0% fall.
The drop revealed today is the worst fall in UK GDP on record since a matching 2.2% fall in 1979.
Build !Build! Build!
Prime Minister Boris Johnson will today pledge £5 billion in fast-tracked infrastructure investment as he promises to “build build build” the United Kingdom’s economy out of the coronavirus crisis.
Boris Johnson will commit to spending on infrastructure to rebuild the virus-ravaged U.K. economy in a major policy speech – Boris Johnson plans to build for Britain.
Today he will attempt to relaunch his premiership in a speech in Dudley, a left-behind Midlands town, by setting out plans to boost Britain’s economic recovery with a big spree of infrastructure investment. “
This is a moment for a Rooseveltian approach to the UK,” he said in an interview on Times Radio, a new digital station, yesterday, referring to FDR, the president who is often credited with lifting America from the Depression with a burst of spending on dams, roads and schools.
Mr Johnson had already planned to spend big on building hospitals, railways and high-speed broadband in order to cement the support of working-class voters in northern England who handed him a landslide in the general election last December.
The pandemic has given those plans new purpose, as Britain faces the prospect of a steep recession and high unemployment for years to come.
Treasury to borrow further £50bn
The Treasury is to borrow another £50bn in August, with this meaning borrowing will hit £275bn in the opening five months of the financial year. The update marks the third revision to the Treasury’s financing requirement since March.
The Telegraph suggests the figures will spark concern that Britain will be paying for the coronavirus crisis “for years to come” through higher taxes.
Record bank deposits in May
Bank of England (BoE) data show that UK households’ bank savings increased by a record amount last month, with deposits up £25.6bn in May to £1.5trn.
Households have banked £57bn since March, the analysis reveals. The figures also show that repayments on consumer credit dropped to £4.6bn in May, down from £7.4bn in April.
Samuel Tombs of Pantheon Macro said spending is likely to rebound over the summer, with reopened shops and businesses drawing consumers, but predicts that consumer spending will still be 5% below pre-virus levels by Q4, even if there is no second wave of coronavirus infections.
BoE analysis also shows that there were just 9,300 mortgage approvals in May, down from almost 16,000 in April and 87% below February’s total.
EY Item Club’s Howard Archer believes housing market activity is “likely to be limited in the near term at least by the major hit that the economy has taken”.
Online shoppers may see delivery tax
Online shoppers could face a delivery tax, with Government advisors backing a measure mooted to counter the damaging effect on the environment that the surge in digital retail has brought.
With the number of parcels shipped by online retailers climbing by 65% in five years, there has been a jump in the number of delivery vans on the road and an increase in cardboard and plastic waste from packaging.
A report from the Department for Transport’s Science Advisory Council say a levy similar to the plastic bag charge would deter consumers from over-ordering and then returning items.
Survey reveals firms’ fears over staffing
A YouGov poll has found that 42% of UK firms believe they will be forced to make redundancies as a result of coronavirus, while just 16% said that they expected to employ more people in a year’s time than prior to the outbreak.
Manufacturing and financial services were among sectors where respondents were most likely to foresee employing fewer staff in a year than they did pre-lockdown. The poll also saw 47% of businesses say they had lower growth expectations in the wake of the pandemic, while 15% had higher expectations.
Oliver Rowe, director of reputation and business research at YouGov, said that while these are “clearly difficult times” for business, some will use this opportunity to reassess their current model. “Lots of businesses already say they will have less need for physical space, as staff working from home becomes more accepted, and almost half expect to make more use of online systems and software than they did prior to lockdown,” he added.
Report flags inequality in pensions tax relief
The Association of British Insurers has called for reform of pensions tax relief, saying the existing system widens inequalities between the sexes and different generations.
It says analysis shows that lower earners and young workers are missing out on tax relief even though more are saving for a pension. Research by the Pensions Policy Institute think-tank found that workers earning less than £50,000 made up 83% of all taxpayers but received only a quarter of the pensions tax relief paid in relation to defined contribution pensions.
The report concluded that the system favours higher earners, with the proportion of people who earn less than £30,000 but qualify for tax relief increasing from 52% to 62% due to automatic enrolment – while just 24% of tax relief goes to those in this bracket. It was also found that men are granted 71% of all pensions tax relief as they pay 69% of the contributions.
The study shows that 42% of those who contribute to a defined contribution pension are under 40, yet this group only receives 27% of the available tax relief, while those in their 40s and 50s typically receive two and a half times as much tax relief.
Lookers auditors say firm overstated accounts
An investigation by Grant Thornton has found that car dealership Lookers overstated profitability by £19m over several years, with overstated bonuses and “fraudulent expense claims” discovered. Lookers said that £4m is related to previously reported issues with one of the group’s operating divisions, with the remaining £15m linked to “the incorrect or inconsistent application of policies, processes and accounting standards”.
Lookers said the Grant Thornton report also found areas where tougher financial controls and changes to the culture of the company are needed. The firm’s long-term auditor Deloitte said it would resign as auditor after the 2019 results, which have been delayed due to an ongoing probe, are published.
Byron faces administration
Upmarket fast food chain Byron is to appoint administrators from KPMG, which has been trying to find a buyer for Byron since early May after it was hired as an adviser by the chain’s private equity owners Three Hills Capital Partners in March. KPMG is reportedly confident that it can agree a deal for the firm, most likely through a pre-pack administration which would protect the company from being taken over by its creditors.
Restaurant Group CVA voted through
The Restaurant Group confirmed that the CVA of its leisure estate has been approved by landlords and other creditors. As a result, 125 loss-making outlets will close with the loss of up to 3,000 jobs while 85 of the remaining 160 restaurants in the division will have their rents cut.
Monsoon landlords agree rent deal
Monsoon Accessorize is to keep 57 more stores open than initially planned after a number of landlords agreed to new turnover-based rents. Administrator FRP Advisory now hopes to preserve 157 of the company’s 230 branches, saving 2,400 jobs.
Sun sets on payday lender
Payday lender Sunny collapsed yesterday, with the coronavirus crisis hitting the already struggling company. The UK branch of Elevate Credit, which trades as Sunny, has asked administrators at KPMG to take over the business.
Wirecard UK could enter administration but FCA lifts ban
Advisers from Alvarez & Marsal have been called in by Wirecard’s UK subsidiary, Wirecard Card Solutions. Options under consideration include placing the UK business into administration. Meanwhile, the Financial Conduct Authority last night lifted a ban on Wirecard Card Solutions payment activities – although it remains subject to restrictions on asset transfers and where customers’ money is kept.
Wirecard woes put audit in the spotlight
Ben Marlow in the Telegraph looks at the scandal at Wirecard, saying it has raised questions over auditor EY, which failed to spot that almost €2bn was missing “despite looking after the books for a decade,” adding that KPMG flagged the matter after an independent audit failed to track down around €1bn in turnover.
Mr Marlow says a class action investor lawsuit linked to the Wirecard scandal will “pile the pressure on EY to act”, with the firm’s reputation having already been “bruised by its involvement in other big corporate blow-ups”. He believes that Wirecard’s downfall should speed up the separation of audit practices from non-audit services but warns that “the industry has proven repeatedly, it is fiercely resistant to real change.”
Elsewhere, the Times’ Oliver Moody looks at two class action lawsuits that accuse German f inancial watchdogs of negligence that allowed that accounting scandal to occur, saying many shareholders blame the Federal Institute for Financial Services Supervision and EY for not spotting problems at Wirecard sooner.
The FT’s Tabby Kinder reports that EY has told partners via an internal note to expect difficult conversations with clients about the scandal at Wirecard. The paper’s Lex looks at the scandal, arguing that a “string of wearily familiar financial scandals” illustrate a number of built-in protections afforded to audit firms.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections