Covid-19 business news 10 July 2020.
10 July 2020.
James Salmon, Operations Director.
A warning on tax, the latest on covid-19, markets and the easing of lockdown, more job losses on the high street and a lot 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
Cases worldwide now top 12.2 million with 227 thousand new cases reported yesterday. Deaths surpass 554,000.
Japan will not declare another state of emergency, even though the country has registered hundreds of new covid-19 cases in recent days. The record spikes of Covid-19 infections in both Hong Kong and Tokyo fueled fears of a second wave hitting Asia. The numbers in the U.S.A. are not encouraging either. Florida, Arizona, Texas and California are all seeing deaths hit record levels and the infection rate for the country as a whole topped the average.
The World Health Organization is also launching a review by an independent panel of its response to the pandemic following criticism about its approach from the U.S administration.
Markets.
UK stocks were 2% lower yesterday, having started mixed and experiencing a sell-off towards the end of the day. Fear over a second wave of covid-19 cases and the potential impact on the global economy outweighed Wednesdays stimulus package from Chancellor Rishi Sunak – whilst a strengthening Pound was a further drag on an index focused on overseas earnings.
Economists warn of day of reckoning
Paul Johnson, director of the Institute for Fiscal Studies (IFS), has warned of likely tax rises as a result of a coming recession. He said getting the UK’s £2trn debt mountain under control will take decades, and is likely to require the Treasury to raise an extra £35bn to £40bn a year once the immediate crisis subsides. He added: “The time to pay for this will come, but not this year and not next.” Deputy director Carl Emmerson said it was too early to predict the scale of the hikes as it depended on how quickly the economy recovered, but said “it could be quite a chunky tax rise.” The Chancellor Rishi Sunak yesterday refused to rule out future tax rises to pay for the record public spending during the pandemic. He said it was “too early to speculate”. Meanwhile, research by Redfield & Wilton Strategies for the Mail found that 71% of the public expect taxes to rise to pay for the coronaviru s bailout package.
Tax gap falls to lowest recorded rate
HMRC confirmed yesterday that the tax gap for 2018-19 is 4.7%, its lowest recorded rate. The tax gap is the difference between tax that should be paid and what is actually paid. HMRC collected £628bn in tax revenue in 2018-19. Jesse Norman, Financial Secretary to the Treasury said: “At 4.7%, the 2018-19 tax gap is the lowest on record. The coronavirus pandemic has highlighted the importance of everyone playing their part and paying the tax that is due.” This is the first year that a stand-alone tax gap for wealthy taxpayers has been included in the report. The total wealthy tax gap stands at £1.7bn and represents a very high collection rate of all tax due within this group. The wealthy tax gap is the smallest proportion of the total gap by customer group, making up 6% of the total tax gap.
Sunak’s £1,000 job retention bonus red-flagged
The head of HMRC wrote to Chancellor Rishi Sunak requesting a “ministerial direction” to proceed with the roll-out of £1,000 bonuses for firms who bring staff back from furlough, according to reports. Jim Harra stressed that there was a “sound policy rationale” for going ahead with the radical plans but it had “proved difficult to establish a counterfactual” for the schemes, adding that “the advice that we have both received highlights uncertainty around the value for money of this proposal”. He also requested written direction to proceed with the £10-per head meal voucher scheme. Paul Johnson, the director of the Institute for Fiscal Studies, also raise doubts about the effectiveness of the scheme saying in a majority of cases the money will go to employers who would have brought people back from furlough anyway. The Chancellor told BBC Radio 4’s Today programme that he accepted that payments would go to support jobs which were not under threat, but said that this was an inevitable consequence of the need to act swiftly to an unprecedented challenge.
Pools, gyms, team sport and outdoor events to return
Culture Secretary Oliver Dowden has announced that pools, gyms, nail bars and tattooists will be able to open their doors to customers again. Outdoor performances will also be able to resume with limited audiences. Outdoor pools and open-air theatre and concert venues will open on Saturday when amateur team sports including cricket will also be able to resume. Nail bars, beauty salons, tattoo parlours and other “close contact” personal services will be open from Monday, with indoor sports venues including gyms, pools and courts following on July 25. However, beauty businesses were left distraught when they were told no treatments to the face would be allowed, such as make-up application and eyebrow treatments. Mike Cherry, chair of the Federation of Small Businesses, called the news a “welcome shot in the arm for the health, wellbeing and happiness of the wider public”, but warned that independent operators would need further support to be compliant with safety guidlines.
British high street loses a further 5,300 jobs
The British high street took a double hit yesterday after Boots announced 4,000 job cuts while John Lewis said it would close eight of its 50 department stores putting 1,300 jobs at risk. Separately, Burger King said it could close up to 10% of its 530 UK restaurants, putting 1,600 jobs at risk. The UK economy shrank by 25% in March and April and could be heading for its biggest fall in 300 years in 2020, with an unemployment rate on course to more than double to about 10%, according to official projections. Julie Palmer, partner and restructuring expert at Begbies Traynor, predicted further significant job losses on the high street. “Many of the biggest companies have been fighting against the tide of destruction before this crisis and there is a huge dam of distressed businesses building and waiting to break.”
UK Retail footfall
The decline in UK Retail Footfall eased in June, numbers today showed, as easing of lockdown measures boosted the embattled sector. UK retail footfall was down 63% annually in June, data from the British Retail Consortium-Shopper Trak monitor showed. However, it was a 19 percentage point improvement from May’s reading.
Stamp duty aid should be more targeted, critics say
The Institute for Fiscal Studies (IFS) has warned that first-time buyers could be priced out of the market after the Chancellor scrapped stamp duty on properties worth up to £500,000. The think tank suggested landlords could drive up prices as could homeowners seeking to move up the ladder. Stamp duty used to kick in at £125,000, but first-time buyers only started paying at £300,000 so that advantage has now been lost. However, the IFS still praised the move and said it would boost the economy by powering up activity in the property market. Labour said the move also provided a subsidy for second home owners and said the tax break was not an appropriate use of money at a time when millions are going through financial hardship.
IFS advises against tax rises and spending cuts
The Institute for Fiscal Studies (IFS) has said the country’s budget deficit could reach £350bn this year and £150bn in 2021. This comes as the latest figures from the Treasury show that public spending during the pandemic rose to almost £190bn.
Laura Ashley collapse to be probed by second administrator
A second administrator has been appointed to examine the finances of collapsed retailer Laura Ashley, with FRP Advisory set to investigate the role of firm’s former directors. The Pension Protection Fund (PPF) requested the additional administrator’s appointment, stating that: “Members of the Laura Ashley retirement benefits scheme, which remains in PPF assessment, can be assured of our ongoing protection.”
FCA demands safeguards at payments businesses
The Financial Conduct Authority has told payment service providers and electronic money businesses that they must strengthen the way in which they safeguard customers’ money after Wirecard’s catastrophic failure brought greater scrutiny to the industry. New guidance issued by the regulator said it had found “material issues” in a number of areas including the failure to properly manage financial crime risks and misleading claims about service and pricing. The regulator indicated that its intervention had been hastened by fears that the COVID-19 pandemic may pose a risk to the viability of payments firms. A spokesman for the FCA said that its work “makes very clear our expectations of what payments firms must do to protect customers’ money robustly”. “The sector has reached the scale where more regulation is required,” said Matt Hopkins, of the global bank team at BDO. “This is the end of light-touch regulation of e-money and payment institutions.”
Apple files accounts showing £6.2m paid in UK tax in 2018
Accounts filed today for Apple Retail reveal that the firm’s UK retail arm paid £6.2m in tax last year on sales of nearly £1.4bn. Profit before tax was £35.8m in 2019, down from £105.6m in 2018, while costs were up 94% to £173.7m from £94.8m in the year earlier period. This comes as Apple awaits the result of an appeal against the European Commission over €13bn in back taxes due to the Irish government. George Turner, director of Tax Watch UK, said: “Apple’s US accounts disclose that the company moves tens of billions of dollars a year out of Europe and into tax havens.” A spokesman for Apple said: “We always pay all that we owe.”
Deloitte faces record £15m fine for ‘serious’ failures in Autonomy audits
Deloitte is facing a record £15m fine for “serious and serial failures” in its audits of Autonomy, the technology group that was at the centre of one of the biggest accounting scandals in UK corporate history. An independent tribunal has ruled that the Big Four firm “signally failed to discharge its public interest duty” when it audited Autonomy in the years prior to its acquisition by Hewlett-Packard for $11bn in 2011, a deal that led to HP writing the UK company’s value down by $8.8bn.The Financial Reporting Council has asked the tribunal to impose a £15m fine on Deloitte, and to exclude partner Richard Knights from the accounting profession for seven years, fining him £500,000 and fellow partner Nigel Mercer £250,000. “The findings are the most serious ever made against an audit firm in a tribunal report,” said Rebecca Sabben-Clare QC, barrister for the FRC, during the hearing. “This was a continuing series of misconduct . . . involving a lack of care and competence by the whole [Deloitte] audit team”. Deloitte said that it acknowledged “the seriousness of the findings”, but argued that the fines should be about half the amounts proposed by the watchdog.
Audit watchdog holds break-up talks with top accountants
Directors from Britain’s leading audit firms were summoned for talks with the industry regulator amid mounting boardroom concerns about the break-up plan it confirmed this week. Sky News understands that independent non-executives from the Big Four were asked to attend a meeting to discuss the issue with executives from the Financial Reporting Council.
West Midlands man arrested on suspicion of £495,000 furlough fraud
A West Midlands man has been arrested as part of an HMRC investigation into a suspected £495,000 Coronavirus Job Retention Scheme fraud. HMRC officers executed a search warrant on Wednesday in the Solihull area and arrested a 57-year-old. This is the first arrest in connection to alleged fraud relating to the furlough scheme.
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