GDP hits buffers – business news 9 October 2020.
James Salmon, Operations Director.
GDP hits the buffers, Sunak to announce local furlough scheme today, UK regulator calls on companies to make reports more accessible, 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.
GDP hits the buffers
The U.K.’s recovery hit the buffers in August as the economy grew at less than half the anticipated pace. Gross domestic product rose 2.1% from July, compared to economist forecasts for 4.6%, even as the government stepped up efforts revive the beleaguered hospitality industry.
Although the figure marked the fourth straight month of growth, it was considerably lower than had been expected. As a result, GDP remains 9.2 per cent lower than it was before the pandemic struck in March.
The figures will come as a concern to officials since August was when virus curbs on activity were at their lowest and government support for the hospitality industry peaked. Swathes of the country are now back under restrictions as cases surge.
Sunak to announce local furlough scheme today
Rishi Sunak will announce a local furlough scheme today in which the Government will subsidise two thirds of the wages of workers in pubs, restaurants and other businesses that are forced to close to stop the spread of the coronavirus. The Times reports that, under the scheme, employers will be able to access the scheme for as long as pubs, restaurants and other businesses are closed. The Telegraph carries news that hospitality bosses are calling for the original furlough scheme to be extended to save the sector, arguing that the Chancellor’s replacement job support scheme is inadequate. The paper’s Ben Marlow says “publicans and restaurateurs are being hung out to dry on the basis of little, if any, scientific evidence,” adding: “The very least that the Government should be doing is providing targeted relief otherwise many pubs simply won’t open again and that would be a huge loss to the fabric of this country.”
UK regulator calls on companies to make reports more accessible
The Financial Reporting Council has published a discussion paper proposing a future for corporate reporting based on a principles-based framework. It outlines a more agile and flexible approach to ensure information better meets the needs of investors and other stakeholders. The paper considers a common criticism that annual reports are too long, and information difficult to access. “As the UK’s corporate reporting framework has evolved, annual reports have become a vehicle of convenience for ever-more information, however, this has undermined their purpose and usability”, said Mark Babington, the FRC’s executive director of regulatory standards. “To build trust in business we need a modern corporate reporting system that is transparent, flexible and puts users of corporate reporting at its heart.
Start-ups stifled as banks reject account applications
The BBC carries a report talking to entrepreneurs who are being denied business accounts by banks with major lenders either closed to new applications or warning of long delays.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “We appreciate banks were swamped with bounce-back applications, but refusing to open business accounts for new customers will stifle start-ups just at the moment we need them most.”
Furlough
One-fifth of furloughed workers in Britain in July worked in the hospitality business; many of those jobs may eventually be permanently culled. So when Britain’s scheme expires at the end of this month, the result could be a painful increase in unemployment in the short term, but a better adjusted economy in the long term.
Covid-19 general news
With 288,841 new cases, global cases pass 36.5 million and deaths reach 1,062,075
The U.K’s caseload jumped with growing anger over Prime Minister Boris Johnson’s strategy for dealing with the pandemic. 17,540 new cases were logged Thursday. A rise of more than 3,000 on Wednesday. Public Health England Medical Director Yvonne Doyle warned of a “definite and sustained” increase in cases and hospitalisations. “The trend is clear, and it is very concerning,”
Test and trace data Thursday showed tracers reached just 68.6% of the close contacts of positive cases in the week ending 30th September, down from 72.5% and significantly fewer than the target of 80%.
Data from the British Retail Consortium laid bare the effect of virus restrictions on shopping habits, with footfall in shopping centers and high streets down more than 30% in September from a year earlier.
Newcastle University said 1,003 of its 28,000 students tested positive for Covid-19 this month and 12 staff members were also found to have the virus
Pubs and restaurants across northern England brace themselves for new lock-down measures expected in response to rising infection rates.
Germany’s new cases topped 4,000 for a second straight day. Its main public-health body warned the country could see “more than 10,000 new cases a day”.
France reported 18,129 new coronavirus cases on Thursday and is placing more cities on maximum alert, with restrictions to expand beyond Paris and Marseille
China joined a World Health Organization-backed vaccine effort COVAX – stepping in to fill a void in global health leadership after U.S. President Donald Trump spurned the program. More than 170 countries have signed up, but the world’s two largest economies were notable exceptions.
India is on track to overtake the USA as the country with the most cases as it neared 7 million.
Brazil added 27,750 cases, bringing the total to 5,028,444. The number of deaths reached 148,957
In Argentina, 15,454 new cases were reported, bringing the total to 856,369. The number of deaths rose by 485 to 22,710
House Prices
UK House Prices are expected to soar more than 20% by 2024, according to the latest research. Analysis by Savills found that UK property prices will jump 20.4% in the 5 years to 2024. Average house prices are expected to rise 4% this year before stagnating in 2021.
Markets.
European markets extended this week’s gains yesterday, after a strong close in the US overnight fed through to the rest of the world. Sentiment improved further after US President Donald Trump seemingly made a U-turn on his comment to close stimulus talks until after the 3rd November election. The White House shifted tack yesterday, signaling that the administration is again leaning toward a large-scale stimulus bill after House Speaker Nancy Pelosi pushed back on the idea of individual measures.
London markets experienced a broad-based rally whilst a surge in the housebuilding sector helped boost the FTSE 100 back towards the 6,000 points level, rising 0.5% as the 250 climbed 0.8%. Housebuilders were higher after the Royal Institution of Chartered Surveyors said UK housing market activity was strong in September. Barratt Developments, Berkeley Group and Taylor Wimpey all added between 2%-4%.
In Asia, the Nikkei is down -0.31%, theHong Kong HSI is up 0.16%, and the China Shanghai SSE is up 1.89%. In the US the S&P 500 rose 0.80% and the NASDAQ rose 0.50%.
Oil prices rose above $43 a barrel, supported by output shutdowns in the US Gulf of Mexico and the prospect of more supply losses in Norway, as well as hopes for further covid-19 relief aid. Gold prices also gained yesterday on hopes of a partial US stimulus deal to support the virus-stricken economy, while investors closely watched the weekly jobless claims report release.
Bailey says Bank still has firepower
Andrew Bailey has said policy makers are not “out of firepower” and will take prompt action to support the economy should a second or third wave of coronavirus materialise. Speaking at a virtual conference on banking stability, the Bank of England Governor warned that the risks to the UK economy were “very much to the downside” due to rising numbers of COVID-19 cases and measures to bring it under control.
City firms look to cut office space
A survey by the CBI and PwC has found that 74% of financial services firms are reviewing their office space needs amid an increase in remote working during the pandemic. Of the 133 firms polled, 88% said there had been a shift to remote working, with half saying most of their staff could work from home. More than two-thirds of the firms were investing in their IT infrastructure, but overall, jobs were tipped to be cut back. Separately, a study by the Office for National Statistics has found that twice as many businesses saw productivity fall when staff worked from home compared with the proportion that found it improved.
Risks ahead for Scotland’s economy
The Scottish Chambers of Commerce (SCC) has said in its latest quarterly economic indicator that the outlook was looking “grim in all sectors”, particularly for businesses in retail and tourism. Employment levels were found to be negative across all sectors with significant risk of these rising further over the winter. The SCC also reported that the number of financial and business services companies reporting concern about rising taxation was the highest on record.
Stamp duty holiday set to save homeowners £500m
Research from the estate agency Benham and Reeves shows 85% of homebuyers have paid no tax on their newly bought property as a result of the Chancellor’s stamp duty holiday. However, the figure excludes properties bought as buy-to-lets and homes bought in September. Land Registry figures reveal the stamp duty holiday cost the Treasury £100m in July and August. Marc von Grundherr, a director at Benham and Reeves, estimates that the total sum could be as large as £524.9m.
End tax-free shopping and thousands of jobs will be lost, Sunak told
The Chancellor has been asked to provide a cost analysis for removing tax-free shopping for tourists amid warnings the move will lead to thousands of job losses at British luxury goods groups. Mel Stride, Conservative chairman of the Commons Treasury committee, has written to Rishi Sunak warning that the move “may cause very significant financial loss to retailers serving the tourism sector, particularly at a time when they are already suffering considerable stress due to the impact of Covid”. The VAT rebate cost the Treasury £521m last year, but retail groups have said that scrapping duty-free shopping could lead to a £3.5bn loss in revenue for businesses, which could reduce tax receipts by up to £680m.
Airbnb hosts in HMRC’s sights over unpaid tax
Following an investigation into Airbnb’s tax affairs the company handed over income details of Airbnb’s 225,000 UK hosts for the tax years 2017-18 and 2018-2019. Experts say people who have earned money from their properties via Airbnb could be landed with bills for unpaid tax, interest and penalties. Fiona Fernie, a tax dispute and resolution partner at Blick Rothenberg, said: “It does not just relate to the last tax year; HMRC are going to look back over several years, so now is the time for people to come clean if they have not paid what they owe to HMRC.” A spokesman for HMRC said: “People with additional income streams may not be fully aware of their tax obligations and so we have taken steps in HMRC to consider sectors, such as short-term property letting, where we may not be collecting the full amount of tax owed. We would encourage customers to check their tax affairs, seeking advice where necessary, in order to put right any honest mistakes or omissions.”
Chappell denies tax evasion charges
Former BHS owner Dominic Chappell stands accused of evading tax on the £2.2m income he received from buying the failed high street chain from retail tycoon Sir Philip Green. Mr Chappell is accused of dishonesty regarding VAT, corporation tax and income tax between January 2014 and September 2016. He denies three charges of cheating the public revenue.
Council warned investments may be unlawful
A Surrey council has been warned that its £1bn bet on commercial property may have been unlawful. KPMG told Spelthorne borough council it has “material concerns” about the use of powers to borrow to invest in properties between 2017 and 2018 and “the level of risk” to which the council is exposed from those transactions. The auditor said there was a risk that Spelthorne had failed to comply with the prudential code, which requires councils to ensure that investment plans are made with sufficient regard to potential risks to the authority. The council said it refutes any suggestion that it acted unlawfully.
WPC chairman says transfer rules ‘must be changed’
Stephen Timms MP, chairman of the Work and Pensions committee, has warned transfer rules must be changed if the industry wants to put a stop to pension scams. At the second reading of the Pension Schemes Bill this week, Mr Timms told the House of Commons savers should not be entitled to their right of transfer in cases where the receiving scheme or destination is listed on the Financial Conduct Authority’s warning list.
LSE
London Stock Exchange has agreed to sell its entire stake in Borsa Italiana to Euronext for €4.33 billion, plus an additional amount reflecting cash generation to completion. The proposed sale, subjected to regulatory approvals and expected to close in the first half of 2021, came as the company said it expected that divestment of Borsa Italiana would be a condition to any European Commission’s clearance for its proposed takeover of Refinitiv.
Stagecoach
Stagecoach said the Covid-19 crisis was still hurting its performance, with regional bus operations particularly affected by a drop off in passenger demand.In a trading update for the financial year through to 1 May 2021, the company said its outlook was unchanged from when it released its full-year results in July.
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.