Covid-19 lock-down business news update 20 May 2020.
20 May 2020.
James Salmon, Operations Director.
The Covid-19 lock-down continues and we are having to make do in a new normal.
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
Britain’s deaths linked to covid-19 passed 40,000 the milestone, making the first European nation to hit that number.
The U.K. government, also got caught up in an ugly row over its covid-19 response, after a minister suggested mistakes were down to the “wrong” advice from scientific advisers.
Member-states of the World Health Organisation unanimously agreed to set up an independent inquiry into the covid-19 pandemic. The “impartial, independent and comprehensive evaluation” will look at the WHO’s own role in the crisis. Trump, in particular, has been critical of the inter-governmental organisation. Its boss, Tedros Adhanom Ghebreyesus, said the inquiry would start “at the earliest opportunity”.
Excitement around the potential covid-19 vaccine from Moderna inc faded after health publication Stat highlighted tthe lack of a press release from the U.S. National Institutes of Allergy and Infectious Diseases, who had partnered with Moderna on the trial, as well as experts who said they were waiting to see more data from the company before drawing a conclusion.
Global carbon-dioxide emissions in April fell by 17% compared with 12 months earlier, according to a study published in Nature Climate Change. Emptier roads accounted for much of the reduction. At the height of their lockdowns, many countries’ emissions fell by 26% or more.
The University of Cambridge is cancelling all face-to-face lectures for the coming academic year, as it seeks to enforce social distancing. Instead they will continue to provide lectures online.
Markets.
The FTSE 100 had a day of reflection yesterday after Mondays big gains, dropping back 46 points to 6002. European Shares also corrected with falls in healthcare, and construction and engineering sectors offsetting the optimism from fresh stimulus plans for the European Union.
The UK Government’s newly announced tariff regime has helped lay the path for a UK-EU Free Trade Deal, according to trade experts. The Department of International Trade announced its new “global tariff” today for when the UK leaves the European Union on 31 December.
Chancellor Rishi Sunak quashed hopes that the UK economy will make a rapid recovery from the sharp economic downturn caused by the Covid-19 lock-down. Speaking at Lords economic committee, Sunak warned it was “not obvious that there will be an immediate bounce back”.
One in ten retailers at risk
One in ten retailers are facing imminent collapse due to challenges brought about by the covid-19 outbreak and resulting lock-down, according to the Opinium-Cebr Business Distress Tracker.
About 510,000 businesses are at a high risk of entering insolvency, according to the tracker.
Many of the firms polled said it would take 28 weeks to recover, three week longer than the previous poll, conducted a fortnight ago.
On a more positive note, 41% said their outlook for the next 12 months is more optimistic than when previously polled, suggesting they are over the worst.
Inflation deflating
The UK rate of inflation deflated from 1.5% in March to 0.8% in April as covid-19 pushed Britain into lock-down, according to data out today. Collapsing oil prices contributed to the plunge in the consumer prices index (CPI) that determines the inflation rate, the Office for National Statistics said. It fell to 0.8% in April, a massive month-on-month drop and the lowest inflation rate since August 2016. Core inflation slipped from 1.6% in March to 1.4% in April
Benefit claimants increase
The Office for National Statistics in the UK has reported that the number of people claiming unemployment benefit increased to 2.1m last month – 856,500, or 69%, more than in March.
The latest release of employment figures revealed the damage inflicted by Britain’s Covid-19 lockdown on employment despite the furlough system.
The number of people claiming unemployment benefits rose to 2.1 million in April, the largest monthly rise since records began in 1971.
Separate figures showed that the number of paid employees in Britain fell by nearly 460,000, a 1.6% decrease between March and April.
With jobless figures expected to worsen sharply in the coming months, Jagjit Chadha, director of the National Institute of Economic and Social Research, commented: “We can reasonably expect unemployment to rise very quickly to something over 10% – something we haven’t seen since the early 1990s,”
While Tej Parikh, chief economist at the Institute of Directors, noted: “Even before lockdown, coronavirus was threatening to take the shine off the UK’s sterling jobs record, and initial estimates for April don’t make for easy reading.”
Chancellor warns of ‘severe recession’
Chancellor Rishi Sunak has warned that the UK is facing a “severe” recession, telling the Lords Economic Affairs Committee that the “jury is out” on the “degree of long-term scarring” that the coronavirus crisis and support measures rolled out to tackle it will cause.
Mr Sunak said lockdown measures are having a significant impact on the economy, adding that the country is “likely to face a severe recession, the likes of which we haven’t seen,” with it “not obvious there will be an immediate bounceback”.
He added: “We are clearly dealing with something unprecedented so economic forecasting is not as precise as it might normally be.”
Shadow economy growing under lockdown restrictions
The Telegraph reports on the growth of the shadow economy in the UK during the lockdown, saying a “grey” economy is emerging as people turn to informal services.
Analysis shows that even before coronavirus-driven restrictions, more than 2m people worked in Britain’s informal economy, with those operating without contracts, benefits or insurance accounting for close to 14% of all employment.
Helen Brand, chief executive of the ACCA, said : “The prevalence of shadow economy activity throws up considerable practical and ethical issues for both business and government,” adding: “The UK has a relatively small shadow economy compared with other countries around the world, but it is quite worrying that by 2025 it [is predicted that it] won’t have fallen by much.”
Antler calls in administrators citing coronavirus
Luggage firm Antler has called in administrators from KPMG, citing the effects of the coronavirus crisis. Some 164 of the firm’s 199 staff have been made redundant across its 18 shops and concessions, with KPMG partner and joint administrator Will Wright commenting: “Like so many companies across the retail and travel sectors, Antler has been profoundly impacted by the COVID-19 pandemic.”
Easyjet hacked
easyJet announced it has been the victim of a cyber attack that has left the details of 9 million customers compromised.
The airline said its investigation revealed that the email addresses and travel details of around 9 million customers were accessed. For a “very small subset” of customers, being 2,208, credit card details were accessed.
EasyJet said it has closed off the un-authorised access and while it has found no evidence of the misuse of personal information, it will be communicating with the 9 million customers affected to advise them.
Home office equipment tax changes introduced
Temporary new rules have been introduced by Financial Secretary to the Treasury, Jesse Norman, exempting people who have been forced to work from home as a result of the covid-19 lock-down from paying income tax and National Insurance on newly-purchased home office equipment.
Jeremy Coker of the Association of Tax Technicians says: “Reimbursing the cost of newly-bought office equipment would under existing rules be taxable and result in a tax bill for the employee. This is clearly unwelcome, and the announcement of a temporary exemption from income tax and National Insurance for such reimbursements is fair and very welcome.”
The Institute of Chartered Accountants noted that it had been lobbying for the exemption since the beginning of lock-down restrictions.
Bonus ban for bailout scheme firms
Large firms using the Government’s COVID-19 bailout scheme are to be banned from paying cash bonuses to executives and dividends under changes to the loan scheme.
Companies wishing to borrow money from the Bank of England’s COVID Corporate Financing Facility (CCFF) beyond May 2021 will be required to commit to showing “restraint” on remuneration while debts are repaid.
State-backed loans under the scheme can now be as large as £200m, up from £50m previously. The new rules apply to companies borrowing more than £50m.
Michael Izza, chief executive of the ICAEW, said: “The restrictions may dampen enthusiasm, but I think it is fair that businesses which benefit from loans should be expected to demonstrate corporate and social responsibility.”
Considering the revision, James Moore in the Independent questions why they make no mention of companies’ tax affairs, arguing that they “can be every bit as controversial as dividends or executive bonuses”.
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