Covid-19 business news update 23 April 2020.
23 April 2020.
James Salmon, Operations Director.
During the Covid-19 outbreak we will continue to share (as we can) the business news stories we have seen that we think will affect our members and readers. The news stories you might have missed that might have an impact on SMEs and those that sell on credit.
Markets
Shares in London rose sharply yesterday with risk appetite returning after Tuesdays declines. The FTSE100 closed 129 points higher at 5770 pushed by recovering Oil majors, BP & Shell both posting 5% plus gains.
The UK annual inflation rate eased to 1.5% in March from 1.7% in February with economists predicting further declines in April given the continued sharp falls in the price of oil.
U.S. markets rose for the first time in three days on Wednesday as crude prices stabilized after a record plunge while better-than-expected earnings also lifted traders sentiment.
Oil Prices continued to rise amid signs that producers are cutting production to cope with a collapse in demand for fuel as the coronavirus outbreak ravages the world’s economies.
Covid-19
Professor Chris Whitty said at today’s Covid-19 press conference that Britons should be prepared for some form of social distancing measures to be in place for the foreseeable future. He said this would only change with a vaccine or “highly effective drugs” available.
Italy registered its highest number of new coronavirus cases in four days on Wednesday. The World Health Organization warned that infections are trending upward in Africa, Latin America and Eastern Europe, even though numbers are for now, low.
The U.K. government is set to survey 20,000 households in a bid to track the spread of the disease.
Spain’s parliament backed a plan to extend a state of emergency to 9th May. And a worrying study found an 88% death rate among Covid-19 patients in the New York City area who had to be placed on ventilators.
UK Budget
The UK Government went slightly over its budget deficit target for the most recent financial year, it revealed today, but that is going to be completely insignificant compared to the deficit will we see after the massive increase in spending to battle coronavirus. Borrowing between April 2019 and March 2020 rose to £48.7bn, compared to forecasts of £47.4bn, according to the Office for National Statistics.
UK companies furlough 2.2m employees
New figures from HMRC show 2.2m employees have now been furloughed by a total of 309,000 companies.
Some 185,000 firms made claims by the end of Monday and another 124,000 submitted applications on Tuesday; Wednesday’s figures are expected to show a sharp increase on this.
The coronavirus job retention scheme sees the state picking up the cost of 80% of staff wages, up to a limit of £2,500 a month for each worker.
The total cost to the taxpayer of the claims made will be £2.6bn, HMRC said. The FT reports on concerns that the slowdown in claims on Tuesday points to a lack of flexibility in the scheme’s design.
Tax cuts crucial to getting economy moving after lockdown
The Telegraph’s Tim Wallace comments on suggestions from the IMF that countries should introduce tax breaks to help their economies come out of the coronavirus crisis.
The IMF recommends cutting taxes that have an effect quickly, such as those paid monthly rather than annually, Wallace notes, pointing to business rates. VAT is also an obvious target as is National Insurance and stamp duty.
Regarding VAT, PwC UK’s chief economist John Hawksworth says cutting the tax was “relatively effective” during the financial crisis “in terms of boosting spending power” and if deployed today “could help bring people back on to the high street”.
Five in six firms unable to cope if lockdown extended
A new survey by the Business West Chambers of Commerce indicates just one in six firms will able to deal with the financial consequences of a lockdown lasting six months.
If the lockdown were to last for 12 months the proportion confident of survival falls to less than 10%.
Inflation set to continue downward trend
Inflation was down in March as oil prices fell and the coronavirus kept shoppers away from stores. The Consumer Prices Index (CPI) inflation rate was 1.5% for the month – down from 1.7% in February, according to the Office for National Statistics (ONS).
Robert Alster, head of investment services at Close Brothers Asset Management, noted: “A collapse in consumer demand combined with plummeting oil prices meant that declining inflation in March was inevitable, and is likely to continue through the duration of the COVID-19 crisis.”
Separately, analysis by KPMG suggests the West Midlands will be hit harder than any other region by the coronavirus pandemic with the region expected to see a 10.1% fall in economic activity.
KPMG said London was better placed than other regions to maintain its economic activity, despite suffering the highest number of cases and deaths in the pandemic. The capital will contract by 7.3% this year, the report found.
Confidence evaporates among Europe’s crisis-hit consumers
Consumer confidence has dropped to its lowest level since the financial crisis in the eurozone with the European Commission’s measure of household morale plummeting to -22.7 for April, from -11.6 in March.
Melanie Debono, Europe economist at Capital Economics, predicts consumer spending to fall by 12% over the whole year – compared with a drop of only 1% in 2009.
A third of UK households believe they will need state support
A third of UK households expect to require financial support from the government over the next months as fears over job security and the state of the economy grow, according to research by Kantar.
The public also doubts there will be a swift V-shaped recovery, with half of respondents believing the economy will be in a worse condition next year
Workers advised to use payroll giving to donate to pandemic relief efforts
Employees who donate part of their salary to fund pandemic relief efforts may find themselves facing an unexpected tax bill, the Times reports.
Peter Hopkins, technical director at AJ Bell, said that unless charity donations are made through payroll giving, bosses and workers may have to pay tax on the salary they have given away.
“The rules were never intended to penalise people in this way but the wording was intended to stop charitable gifts through the employer and it looks like they might bite in the current environment,” he said.
Hiscox facing legal action over pandemic payouts
Coordinated legal action against Hiscox is being planned by over 100 nightclubs, pubs and bars over the insurer’s non-payment of business interruption insurance claims.
Michael Kill, chief executive of the Night Time Industries Association (NTIA) coordinating the action, remarked: “Businesses are being denied legitimate insurance claims, many claims are being disputed by insurers based on contrived arguments to avoid sharing the financial burden during the COVID-19 crisis.”
Two separate Hiscox action groups, together involving some 200 further claimants, are also considering taking legal action.
DON’T LET CORONAVIRUS 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).
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