Business News
16th October 2019.
James Salmon, Operations Director.
INDUSTRY
Leadsom dismisses concerns over FRC ‘drift’
Sir John Kingman, the former Treasury mandarin whose report last year paved the way for the abolition of the Financial Reporting Council (FRC), warned yesterday that ministers are in danger of letting the body “drift on, half-reformed and lacking the teeth that only legislation can give it”. Sir John’s remarks were contained in a letter sent on Tuesday to Rachel Reeves, who chairs the Business, Energy and Industrial Strategy (BEIS) select committee. Sir John expressed disappointment that the primary legislation required to put the FRC’s successor – the Audit, Reporting and Governance Authority (ARGA) – in place was not among the 26 bills included in Monday’s Queen’s Speech. Andrea Leadsom later told parliament’s business committee that many of the Kingman reforms could and were being implemented without legislation. The business secretary added that the government intends to consider “in the first quarter of next year” the review of the purpose of audit from Donald Brydon alongside the Kingman and CMA reviews “to ensure we maximise all the learning points”. A BEIS spokesperson said: “We are committed to implementing the outcome of Sir John Kingman’s review and will legislate to put the new audit regulator on a statutory basis as soon as parliamentary time allows.”
Financial Times The Times, Page: 38 City AM Daily Mail
CORPORATE
MPs criticise Thomas Cook bosses over collapse
Thomas Cook bosses have been criticised by MPs on the Business, Energy and Industrial Strategy (BEIS) Committee for their executive pay and accounting practices in the lead up to the collapse of the travel business. Appearing before the cross-party MPs were Thomas Cook CEO Peter Fankhauser, former chair Frank Meysman, former CFO Sten Daugaard, former chair of the audit committee Martine Verluyten, and former chair of the remuneration committee, Warren Tucker. The executives were accused of allowing the company to carry too much goodwill on its balance sheet, resulting in a £800m writedown in May. Mr Fankhauser said he was sorry for the collapse but that the reasons for it were “not one-sided”. He added that no UK government ministers were in direct contact with Thomas Cook in the six days before its collapse, prompting a call from Labour for a “full public inquiry into the government’s handling of this scandal”. In a separate committee meeting, business secretary Andrea Leadsom insisted that Thomas Cook’s turnaround plans were not “viable” and that a Government bailout would amount to “throwing good money after bad”. In the coming weeks, the committee will question auditors PwC and EY, the Financial Reporting Council (FRC) and the Insolvency Service. Earlier his month the FRC announced a probe into the financial statements of Thomas Cook Group plc for the year ended 30 September 2018. EY has audited Thomas Cook for the last two years and was preceded by PwC.
Financial Times, Page: 20 BBC News The Daily Telegraph, Business, Page: 1, 3 The Times City AM Daily Express, Page: 15 The I, Page: 4
Wirecard shares slide following FT report on accounting practices
Shares in German payments firm Wirecard fell up to 22% in early trading on Tuesday, after documents concerning suspicions of fraudulent accounting were published. Files appeared to show a concerted effort to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland, as well as to potentially mislead Wirecard’s auditor, EY.
Financial Times, Page: 11 The I, Page: 41
SMEs
Entrepreneurs issue rallying cry for independent Britain
Nearly 300 business leaders have written an open letter to Boris Johnson urging him to ensure that Brexit is not delayed further because “this rank uncertainty is crippling British business and it cannot continue”. The letter, organised by the Alliance of British Entrepreneurs, warns an extension will result in another hung Parliament “with more delay and more damaging uncertainty”. It adds that “the UK is the centre of world finance and a leader in the industries of the future. We are an immense global power. It’s time to start acting like one.” One signatory, Matt Taylor, the founder of investor Rockpool Investments, said: “Our businesses are prepared for no deal. With Government and Britain’s entrepreneurs working hand in glove, we can create a hyper competitive, business-friendly powerhouse of an economy – a true alternative to the sclerotic, backwards looking and lobbyist-riddled EU.&rd quo;
The Daily Telegraph
Poor broadband hinders business expansion
A survey by the Federation of Small Businesses has found that poor broadband and mobile connections holds businesses back with a third blaming poor connectivity for preventing them from contacting or being contacted by existing customers. Some 26% said that poor mobile coverage had led to a loss of business. Separately, a study on productivity, efficiency and general sentiment of UK small business by website platform Wix found two in five businesses still don’t have an online presence, while one in three that do have a website are not fully digital. Nine in 10 businesses that are completely digital – using tools for tasks such as invoicing and payments, customer service, chat and other automations – revealed their revenue had increased by an average of £35,000 a month.
The Times, Page: 42 Daily Mirror, Page: 37
PROPERTY
First-time buyers at highest levels since 2007
The number of first-time buyers in August reached the highest level since just before the financial crisis, according to the latest mortgage trends data by UK Finance, with 35,010 mortgage completions for new buyers – an increase of 0.7% on August last year. During the month there were 18,640 new remortgages with additional borrowing, down 2.9% on 2018, while the number of remortgages without additional lending slumped 2.3% to 18,100. There were also 5,900 new buy-to-let mortgages completed, down 2.2%. Andrew Montlake, managing director of mortgage broker Coreco, said: “First time buyers are absolutely flying. They are being driven on by a combination of reduced competition from landlords, once-in-a-lifetime mortgage rates, high employment and the buyer’s market we’re in.”
City AM Daily Mail
House prices face steep fall if no deal reached
Standard & Poor’s (S&P) predicts that in the event of a no-deal Brexit UK house prices will end the year 1.7% lower than in 2018. Over the course of 2020 prices will fall a further 10.2% and another 6.1% in 2021. House values will rise again in 2022 by 5.9%, S&P said. Last month, KPMG said prices could fall by around 6% in 2020 without a Brexit agreement, “with a drop of 10-20% not out of the question” if the market reacts more strongly than the consultancy projects.
The Independent, Page: 50
PENSIONS
Removal of 25% tax-free lump sum would be own goal
A proposal from the Institute of Economic Affairs that the tax-free lumpsum which savers are allowed to withdraw from their pension is scrapped has been roundly rejected by pensions experts. Mark Littlewood, the group’s director-general, explains that removing the ability to withdraw 25% tax free from a pension would provide an opportunity to reduce or scrap inheritance tax altogether. But Andrew Tully, technical director at insurance giant Canada Life, says: “The ability to withdraw 25% of your pension, tax free, is probably the most valuable perk of pension savings and certainly the best understood. You diligently save for many years and are likely to have clear ideas on how you want to use your tax-free cash lump sum. Many people use the money to pay off their mortgage, make home improvements or go on the holiday of a lifetime. No one is planning for this or expects the rules to change.”
Daily Mirror, Page: 34
Savers rush to top-up pensions
HMRC figures show savers are topping up their pensions in record numbers with people paying £119.3m in voluntary contributions last year, compared with just £12.8m in 2016/17. The surge is likely to reflect the introduction of the new state pension in 2016, which gave people the opportunity to plug gaps in their NI record through voluntary contributions.
Daily Mail, Page: 47
TAX
Uber is a test case for taxing digital platforms
HMRC’s VAT claim against Uber will prove a test case for digital platforms which gain an advantage over traditional businesses by shifting responsibility for paying VAT on to contractors or merchants.
Financial Times, Page: 13
FIRMS
Aberdeen dealmaker in national tie-up
Hall Morrice Corporate Finance has joined forces with UK advisory firm Dow Schofield Watts as part of “strategic growth plans”. The Scottish mid-market dealmaker will remain in its existing Aberdeen base and retain a “close relationship” with the Hall Morrice accountancy firm but operate under the Dow Schofield Watts brand.
The Scotsman, Page: 34 Yorkshire Post, Page: 19
Prince’s partners silent on Epstein
Some of the main sponsors of the Duke of York’s Pitch@Palace initiative have refused to confirm their ongoing support in the wake of the allegations surrounding his friendship with convicted paedophile Jeffrey Epstein. Founding partner KPMG refused to comment when asked as did Barclays, Standard Chartered Bank and Air Asia.
The Daily Telegraph, Page: 9
ECONOMY
UK jobs market slows
Office for National Statistics figures show that the unemployment rate unexpectedly increased to an estimated 3.9% in the June-to-August period, as the number of people working declined by 56,000 to 32.69m. The ONS’s deputy head of labour market statistics, Matt Hughes, noted: “The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months.” Meanwhile Thomas Pugh, UK economist at Capital Economics, suggested that labour market activity is being restrained by underlying weakness in economic growth, but suggested: “However, it could also be evidence that the uncertainty around Brexit is starting to impact firms’ hiring decisions.”
BBC News Financial Times City AM The Guardian, Page: 37
Innovation, in the long run, is almost everything
Craig Vickery, the head of ACCA Scotland, explains in a piece for the Scotsman the new productivity index drawn up by KPMG and CBI Scotland. A new report from the ACCA: Innovation in Public Finance, outlines three specific challenges to overcome poor productivity and allow for radical innovation to flourish.
The Scotsman, Page: 28
Scottish retail sales decline for fifth month in row
A report from the Scottish Retail Consortium and KPMG reveals the Scottish high street has suffered its fifth successive month of shrinking sales as consumers hold back from serious spending commitments.
The Scotsman, Page: 35Do 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 you 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.
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