Disorderly Brexit costs – business news 15 October 2020.
James Salmon, Operations Director.
The OECD warns over the costs of a disorderly brexit, job cut fears, retail property prices, mortgage applications soar, covid-19, market and other business news.
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.
Disorderly Brexit could damage UK’s economic recovery
The OECD has warned that the UK’s economy faces a double risk to recovery from a disorderly Brexit as the coronavirus pandemic drags down growth. The think-tank said the COVID-19 pandemic would further complicate a disorderly Brexit as companies were less prepared for the end of the transition period, having diverted attention away from leaving the EU. It warned that failure to secure a free trade agreement before the UK leaves the Brexit transition period at the end of December would leave the economy 6.5% lower in the next few years than would have been the case if existing arrangements with the EU had been maintained.
Brexit
Prime Minister Boris Johnson will not walk away from Brexit negotiations today, despite setting a 15 October deadline for reaching an “outline” for a trade deal with the EU. Johnson signaled that he will not decide whether an agreement with the bloc is possible before the EU summit in Brussels, following advice from Brexit envoy Lord Frost.
One in five bosses expect job cuts by year-end
A fifth of UK business bosses believe they will need to axe up to one in 10 of their workforce by the end of the year, YouGov research reveals. The poll of 1,108 key decision makers shows that 21% expect to reduce headcount by around 10% before 2021, with this climbing to 26% among bosses at businesses employing more than 250 people. More than 10% of hospitality and leisure businesses plan to make cuts of more than 50% of their workforce by year-end, with 8% in the real estate sector and 6% in retail saying the same.
Pandemic to hit retail property values
A Duff & Phelps poll of investors suggests retail property values are expected to fall up to 40% over the next year due to the coronavirus crisis. The survey saw 37% of investors say they expect retail to suffer the worst long-term damage, while 36% flagged hotels as the sector likely to be hardest-hit. Most respondents expect these sectors to see a drop in value of between 10% and 40%. Almost four in 10 expect the pandemic to take between 5% and 10% off the value of commercial real estate assets in 2020, while almost a third predict a drop of 10% or more. More than a third believe the online shopping boom will see the industrial and logistics sector emerge the strongest, with 29% pointing to residential assets. Many investors foresee a bounce back in 2021, with 90% expecting asset prices to go back to pre-pandemic levels next year.
Mortgage applications soar after lockdown
Mortgage applications soared to an estimated value of £216bn after the coronavirus lockdown was lifted, however the closure of the housing market means lending is expected to be down compared to last year. Research from Experian shows that mortgage applications were up 13% year on year in July, followed by rises of 25% in both August and September. According to data from the credit reference agency, 1.2m mortgages will be agreed this year at a value of £216bn, compared to 2019’s £250bn across 1.5m loans. Lisa Fretwell, managing director of data services at Experian, said: “ Tax incentives and an extended period indoors have encouraged people to make a move this summer.”
Covid-19 general news
Global cases pass 38.5 million and deaths top 1.09 million as there were 19,724 new cases in the UK
An imminent change in Covid lockdown rules in London is likely, according to an official in Mayor Sadiq Khan’s office, which would ban two separate households from meeting indoors
Europe’s seven-day rolling average of cases per million outstripped America’s for the time since the spring.However, infections in America are still rising in more than 40 states.
In Ireland, all household visits are to end and non-essential businesses in some areas to shut, while Northern Ireland went further, closing schools, bars and restaurants
France imposed nightly curfews in Paris and eight other big cities to combat a quickening rise in covid-19 cases
Markets.
Shares in London declined yesterday as investors exercised caution amid speculation of a “circuit breaker” lock-down to help control the spiraling number of COVID-19 infections in the UK. Over in the US markets were subdued after a mixed set of bank results – Goldman Sachs edged higher as strength in its trading business helped quarterly profit rise by 94%, however Bank of America slipped by more than 4% after it missed revenue estimates and Wells Fargo was also in the red as its profit fell short of forecasts. US Markets ended down for a second day after comments from Treasury Secretary Steven Mnuchin dampened expectations of a coronavirus stimulus deal. Overnight, the S&P 500 dropped -0.66% and NASDAQ dropped -0.80%. Asian Markets traded mostly lower overnight, although shares in Australia bucked the trend and edged higher.
Oil was steady with researchers predicting renewed downward pressure from concerns that a recovery in demand will be stalled by rising Covid-19 cases worldwide. Gold gained around 1% in the afternoon, rebounding from its sharp decline , as the dollar weakened and uncertainties surrounding the US election and global economic recovery boosted the safe haven metal’s allure.
Manufacturing
New figures from Eurostat suggested that Europe’s manufacturing rebound was running out of steam even before covid-19 infection rates began to increase in recent weeks. Industrial production in the euro area rose in August by a lower-than-expected 0.7% month-on-month. And output is still down by 7.2% compared with the same month in 2019.
Supply warning sparks electricity concern
The National Grid has warned of tight electricity supply margins as power plant shutdowns coincide with low output from wind farms in the coming days. The Times says the rise of intermittent renewable generation has posed challenges in balancing supply and demand. Tom Haddon, a utilities analyst at PwC, said: “We need to ask questions of policymakers on incentivisation of batteries and low-carbon firm generation”, saying the issue is “a dashboard warning light on the journey” to emissions hitting net zero.
Questions raised over digital services tax
MPs have voiced concern over the digital services tax following reports that tech giant Amazon will not be affected by the levy as it will pass on the cost to small traders who use its online marketplace. Dame Margaret Hodge, chair of the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax, said: “The Treasury must go back to the drawing board on the digital services tax so that we can properly tax tech companies like Amazon and create a fairer system for high street businesses.” She added that the tax appears to be “full of loopholes”. Damian Collins, former chair of the Digital, Culture, Media and Sport Select Committee, said the levy, which was brought in to “try to make up some of the tax that should be paid” by large tech firms, “will have failed if this is how it is applied.” Leo McKinstry in the Express calls for a reform of taxation that would target large tech firms, proposing new taxes on sales or turnover.
Higher taxes needed to balance the books
The Organisation for Economic Co-operation and Development (OECD) has suggested that higher taxes could be the path to easing national debt that could hit 120% of GDP in the wake of the coronavirus pandemic. OECD economists say higher taxes, tight controls on spending and new measures to boost jobs and growth may be required, mooting measures including the removal of some tax exemptions and reliefs, making pensions wealth liable for inheritance tax and a tougher crackdown on tax evasion. Meanwhile, the International Monetary Fund says the wealthy should pay higher taxes to ease economic pressure brought about by the pandemic. Its head of fiscal policy, Vitor Gaspar, said officials across global economies should “adopt measures to improve tax compliance and consider higher taxes for the more affluent groups and highly profitable firms”.
Barratt boss calls for stamp-duty reform
David Thomas, the boss of housebuilder Barratt, has called for a reform of stamp duty that goes beyond the holiday that was rolled out during the coronavirus crisis and is set to end in March next year. He said: “We’ve got to be thankful that the holiday has brought so many customers to market,” but added that “permanent change is a different conversation.”
Test and trace consultant costs
A number of papers look at the costs involved in having private sector consultants help to run the Government’s Test and Trace programme. They note that more than 1,000 consultants from Deloitte are said to be working on the programme, with day rates of as much as £2,360. The Guardian says staff from firms including KPMG have been put on standby to work on “back office” parts of the system “on a short-term basis” over the next six months, with EY among other firms “thought to have been contacted for help”.
Firms call for mandatory reporting of ethnicity pay gaps
A letter to the Telegraph calls on the Prime Minister to make it mandatory for organisations to report on their ethnicity pay gap. Noting that 11% of companies have already done so, signatories say voluntary publication “will never be enough”, adding that until all organisations with more than 250 employees have to report on their pay gap, “none of us will have the depth of insight that we need to bring about change at the right scale.” They add that UK businesses “stand ready to make this country one of the fairest places to work in the world”, arguing that mandatory ethnicity pay-gap reporting “would be a monumental step towards that ambition”. Signatories include KPMG vice chair Richard Iferenta; Grant Thornton CEO David Dunckley; Deloitte deputy CEO Dimple Agarwal; Hywel Ball, UK&I regional managing partner at EY; and PwC’s chief people officer, Laura Hinton.
GBK bought in rescue deal
Gourmet Burger Kitchen has been saved, with Boparan Restaurant Group, which took Carluccio’s out of insolvency earlier this year, snapping up the chain in a pre-pack administration overseen by Deloitte. The deal will see 26 branches close, with the loss of 362 jobs. Gavin Maher, joint administrator at Deloitte, said: “As with a number of dining businesses, the broader challenges facing bricks and mortar operators, combined with the effect of the lockdown, resulted in a deterioration in financial performance.”
Nestlé hungry for Mindful Chef deal
Online recipe box business Mindful Chef could soon have a new owner, having entered into exclusive negotiations with Nestlé. The sale process, expected to see the firm change hands for around £50m, is expected to conclude shortly.
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.
You put up with the PAIN – now claim the GAIN!
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.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
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.