Call for emergency insolvency rules extension – business news 9 September 2020.
James Salmon, Operations Director.
A call for Emergency Insolvency rules to be extended, the jobs recovery, funding, furlough, 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.
Emergency insolvency rules must be extended
The Institute of Directors has called for emergency insolvency rules designed to give breathing space to struggling company directors to be extended or risk “company collapses and job losses”. Directors’ liability for “wrongful trading” was relaxed in response to the pandemic but is due to come back into force next month. Roger Barker, director of policy and corporate governance at the Institute, said: “Directors must be in a position to see their organisations through the crisis. They shouldn’t be penalised for acting responsibly amid unprecedented circumstances.”
Jobs recovery evident but pay continues to fall
The latest Report on Jobs survey from the Recruitment and Employment Confederation and KPMG shows hiring increased last month for the first time since March. However, pay continues to fall as rising unemployment shifts the balance in the labour market from workers to business. Job placings for temporary workers grew at the quickest rate in 20 months while permanent placings rose only “marginally”. The loss of 750,000 jobs between March and July combined with the jobs lost among the self-employed was behind a continued fall in starting salaries in August, the report found.
British Business Bank seeks funding boost to drive UK recovery
Keith Morgan, the outgoing CEO of the British Business Bank, has said the bank should play an “essential role” in supporting small business growth as the country rebuilds after the coronavirus crisis
Government to fund projects across home nations
The Telegraph details how the Internal Market Bill will enable the UK Government to fund projects UK-wide and support businesses or local authorities in Scotland, Wales and Northern Ireland. Since devolution, ministers in London have not been allowed to spend public money in certain policy areas. Alun Cairns, a former Conservative Wales secretary, said: “Although the primary role of this Bill is to protect the UK Market, it’s also the start of the Union fight back.”
Improved air quality would give economy a £1.6bn boost
The UK could see a £1.6bn boost a year to the economy if air pollution was reduced to meet World Health Organisation guidelines, according to research by CBI Economics. The benefits would come from reductions in early deaths, sickness absence and improved productivity. Rain Newton-Smith, of the CBI, said: “Not only is there a clear moral responsibility to address air pollution and the impact it has on human health and the environment, there’s also a striking economic rationale.”
Lloyds forced Bounce Back Loan users to open business accounts
The Competition and Markets Authority has criticised Lloyds Bank for forcing 30,000 small company owners to open fee-paying business accounts to get Bounce Back Loans from the Government’s support scheme. The customers were mostly sole traders running their businesses from their current account. Lloyds said it had no processes in place to lend to businesses through personal accounts and so asked them to open a business account. The bank alerted the CMA and has now agreed to a series of remedies to ensure that customers are not impacted.
Haldane warns against furlough scheme extension
Andy Haldane, the Bank of England’s chief economist has warned the Government against extending the furlough scheme, arguing that it would interrupt the “necessary process of adjustment” that was already underway. Rejecting concerns about a spike in redundancies, Mr Haldane said it was the central bank and Government’s job to support the transition to new ways of working. In a City AM podcast, he said the pandemic has caused “lasting structural damage” to the economy and that “regrettably, some business will not make it through”. His comments come as figures from the Insolvency Service show that employers filed plans in June and July to make more than 300,000 job cuts. This would be in addition to the 730,000 employees already made redundant during the pandemic and the 300,000 self-employed people unable to find work.
Tens of thousands of potential fraud cases relating to furlough scheme
Some 27,000 potential cases of fraud connected to the Government’s furlough scheme are to be investigated by HMRC, Downing Street has said. The news follows the disclosure on Monday by the head of HMRC, Jim Harra, that the department predicts a loss of £3.5bn resulting from people fraudulently claiming payments under the initiative. A Government spokesman said: “Where genuine mistakes have happened, HMRC will work with employers to correct claims, but if any claim is suspected of fraud or is based on dishonest and inaccurate information payments may be withheld or need to be repaid. HMRC won’t hesitate to take criminal action in the most serious cases.”
Cost of coronavirus response over £200bn for first six months
The National Audit Office (NAO) says Government spending on over 190 measures in response to the coronavirus crisis has cost the Treasury £210bn so far. The NAO said £70bn of the promised funds had been spent, and there were a number of measures still to be fully implemented. The Treasury’s furlough scheme, with a price tag of £47bn, was the single most expensive intervention and £35.4bn of this has been spent so far.
Covid-19 general news
Global cases reach 27.5 million and deaths 897,000
New cases in the UK rose above 3000 per day for the second day running.
Professor John Edmonds, a member of the government’s Scientific Advisory Group for Emergencies said the UK is in a risky period as the R rate has moved above 1. This view echoed earlier comments from Professor Van Tam, England’s Deputy Chief Medical Officer that the rise in C-19 cases is because “people have relaxed too much” especially “in the 17 to 21 age group”.
All social gatherings of more than six people will be banned in England from the 14th September, under new limits to be announced by Prime Minister Boris Johnson on Wednesday.
Police will have new powers to disperse and fine any group larger than six people meeting indoors or outdoors. There will be exceptions for people grouping for work, weddings and funerals, and for organized sports, but parties in pubs and restaurants, and gatherings in public spaces will all be hit by the new limits.
AstraZeneca has put on hold a Phase 3 study testing a Covid-19 vaccine due to a suspected serious adverse reaction in a participant in the U.K. A spokesman said such pauses were normal; illnesses often happen by chance.
AIDS Healthcare Foundation said that the derailing of Astra’s trial and other “warp speed” research efforts underway risked damaging public confidence in the drug research process. The “downside risk of rushing a vaccine through trials in order to bring it to market first is a bad bet” said AHF President Michael Weinstein.
German reproduction rates continue to remain elevated above 1.0 with new cases at 1,331 pointing a second wave in Europe.
Deaths in India continue to rise with over 1000 deaths for the 8th straight day.
Ireland reported its highest daily new cases since May.
Argentina reported a daily record of 12,027 new Covid-19 cases
Los Angeles has banned trick or treating.
Offices in central London are set to decline in value by as much as 10% this year as the pandemic drives down demand for space.
Markets.
The FTSE 100 fell 0.2% yesterday off the back of rising Covid cases and a falling US market but was supported by the falling pound. The index falls on the other side of the channel were more significant.
Last week’s slide in tech stocks continued after the long Labor Day weekend. A falling oil price also battered energy stocks. The Nasdaq index closed down 4.1% and the S&P 100 down 2.8%.
Sterling fell sharply after the FT reported the head of the UK government’s legal department had quit in protest at the UK plan to renege on parts of the Withdrawal Agreement that was negotiated under PM Boris Johnson. The Telegraph reported overnight that PM Boris Johnson planned to tell the EU the wording of the Withdrawal Agreement is “contradictory”. Sterling fell to almost €1.10 and $1.295 on the view that the UK would crash out of the EU single market without a deal at the end of 2020.
Tesla Inc fell 21% to $330.21 per share as investors priced in news that the stock would not be joining the Standard & Poor 500 index. Furthermore there was talk of significant losses on last Friday’s placing of $5bn of new Tesla shares
Oil prices fell sharply to $40 per barrel declining below key support levels as concerns rose that Saudi Arabia is undercutting opec rivals.
Gold prices fell $4.10 to $1925.40 per ounce failing to benefit from declines in global equities.
Brexit
Northern Ireland Minister Brandon Lewis conceded the government will break international law by attempting to rewrite the withdrawal accord reached with the European Union, an admission made just after two of the country’s most senior legal advisers quit. That has caused outrage within the Conservative Party, with lawmakers warning it would damage the U.K.’s global standing.
Private equity says tax rise would drive industry out of UK
The British Private Equity & Venture Capital Association is lobbying the Government not to increase taxes on carried interest – whereby a private equity executive’s share of profits is a carried interest in their fund rather than performance-related pay. This typically enables them to pay capital gains tax at up to 28% rather than income tax at up to 45%. Arun Advani, an academic at the University of Warwick, said: “Private equity is the only part of the UK’s financial industry that gets access to these lower tax rates for individuals. So it would make sense for a government committed to supporting everyone in the financial sector to tax it at the same rate as income.” The Telegraph notes that Nat Rothschild tweeted that it was “indefensible” that carried interest is taxed at a lower rate than traditional stock option awards given to executives at UK companies. “It is another reason why the pool of listed companies is shrinking” he added
Amazon paid less than £300m in UK tax last year
Amazon’s British subsidiaries paid £293m of direct tax in 2019 on revenues of almost £14bn. This is a 33% increase from the £220m paid in 2018 when revenues were 26% lower. Amazon does not reveal profits or corporation tax payments for its entire UK operation. Paul Monaghan, head of the Fair Tax Mark campaign, said: “Amazon is growing its market domination across the globe on the back of income that is largely untaxed – allowing it to unfairly undercut local businesses that take a more responsible approach. Contrived financial arrangements lie at the heart of Amazon’s success.”
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