New Insolvency proposals and other business news 28 July 2020.
22 July 2020.
James Salmon, Operations Director.
We look at new insolvency proposals, movement in business confidence, SMEs on the return to work and the innovative ideas needed, Covid-19 , marts and lots of other business stories
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.
New Insolvency proposals
Under new Law Commission proposals,c onsumers who have prepaid for goods will be better protected if the retailer goes insolvent .
The commission’s proposals will make it fairer for consumers and reduce the risk of them losing out if the company they have bought goods from becomes insolvent before goods are delivered.
Under the current rules, if a retailer falls into administration, goods paid for in advance but still in its possession will be considered as assets belonging to the business with the consumer treated as a creditor of the business. These goods can then be sold by the company’s administrators and used to pay off the company’s debts.
Consumer affairs minister Paul Scully has asked the Law Commission to consult on draft legislation to update the law that establishes when consumers legally own goods for which they have paid. This is known as the transfer of ownership, and the law in this area dates back to 1893. PaulScully said: “With more and more people prepaying for goods online, it is so important our laws are up to date to reduce the risk of customers losing out if a business unfortunately becomes insolvent. This consultation will look at how the law can be brought into the 21st century, providing clarity for those managing insolvencies and better protection for consumers.”
The proposals would protect those shopping online where goods are not immediately handed over at the point of sale, unlike when shopping in store.
In 2020, about 20% of all retail sales are online and require pre-payment. The past few months have seen internet sales jump from 19.9% of all retail sales in January 2020 to 32.8% in May 2020.
The Law Commission recommends that legislation should include a list of events and circumstances which would be sufficient to transfer ownership to the consumer. For example, goods having been manufactured to the consumer’s own specifications, such as a sofa, or goods having been labelled with the consumer’s name.
Professor Sarah Green, law commissioner, said: “The current transfer of ownership rules are shrouded in complex language which consumers can find difficult to understand. We believe it is time for the rules to be modernised so that consumers have clarity on their rights of ownership, especially in an insolvency situation.”
The changes would be in addition to the recent Corporate Insolvency and Governance Bill, which also made permanent changes to the UK insolvency regime.
Business confidence returns but hiring remains postponed
Business confidence rose by eight percentage points to -22% in July, the highest since the lock-down was imposed in March, according to the latest Lloyds Bank Business Barometer. However, fears about a second spike in infections are weighing on consumer confidence while higher unemployment is expected to further weigh on demand. Lloyds found 16% of companies plan to bring back all their furloughed employees. A further 24% expect to retain more than 90%. Just 17% of businesses expect to increase employment over the next 12 months, up one point from June, while 40% expect to cut staffing levels.
SMEs need workers back in the office
MPs and small business groups have called for ministers to toughen up the Government’s “get back to work” message after an audit by the Mail revealed big businesses were not planning to bring staff back to offices until at least towards the end of the year.
Mike Cherry, of the Federation of Small Businesses, said: “A big chunk of the small business and self-employed community relies on commuter footfall and staff being in offices for work. All over the country, cafes, restaurants, dry cleaners, stationers and convenience stores – plus IT, maintenance and cleaning contractors – are all suffering, especially those based in the middle of cities.”
The Mail notes that most of KPMG’s 16,000 office-based workforce were unlikely to return until next year. Only 50% of PwC’s 22,000 office workers will have returned by the end of September while EY said its offices would reopen from September 7, but on a “reduced capacity basis.” The firm has about 11,200 office staff.
Innovative ideas will keep small enterprises running
The City UK’s Adrian Montague says in the Financial Times the group’s plan to recapitalise SME’s state-backed loans post-COVID-19 “is not a call for taxpayer handouts,” but a means to “convert, restructure and repay” unsustainable debt.
Land Registry to accept electronic signatures
HM Land Registry will start accepting electronic signatures from next week, it has confirmed, paving the way for the entire conveyancing process to be conducted electronically. HMLR will accept witnessed electronic signatures for transfers of property ownership, leases, mortgages and other property-related dealings. The “mercury approach” for signatures – which allows for a signature page to be signed in pen in the physical presence of a witness – will remain.
Sunak warned against taxing online sales
The British Retail Consortium has warned Rishi Sunak against plans to impose a 2% tax on online sales claiming the move would lead to higher prices for consumer. According to a report in the Times, the Chancellor is considering two types of online retail tax: a levy of about 2% on all goods bought online, which could raise £2bn a year; and a tax on consumer deliveries, which would also help to curb traffic and pollution.
Tom Ironside, director of business and regulation at the BRC, said: “Taxing the sale or delivery of online goods would simply be another burden on an already overtaxed industry, one that would ultimately hit consumer spending through higher prices. Throughout the pandemic, many of us have been relying on retailers to ramp up their online services to ensure we can all get the goods we need. The government should not harm these efforts by further taxing the businesses providing these services, and the people they serve.”
In a letter to the Times, George Bull, senior tax partner at RSM, says an online sales tax would take too long to come into force. He suggests a voucher scheme to get people buying from high street shops instead.
Cost savings and improved efficiency after lockdown
Chartered accountants Wylie & Bisset have said businesses increased efficiency as a result of home working following the onset of the coronavirus pandemic, with employees saving money at the same time.
Partner Andrew Cowling remarked: “As the lockdown showed, the greater flexibility around work scheduling that home working enables can lead to a better work life balance, which is enhanced by saving time and money on the twice daily morning and evening rush hour commutes to and from the office – and all the stress associated with that.”
He went on: “The crisis gave us the time to review our working processes and we have since embraced the need for flexibility and a better work/life balance.”
Masked Retail footfall
Retail Footfall dipped slightly at the end of last week as face coverings became mandatory in English stores. Visitor numbers at retail destinations in England fell 1.7% on Friday and Saturday. On Friday it became compulsory to wear a face covering in shops in England.
Demand for disinfectant
Reckitt Benckiser booked a 12% rise in first-half profit and said it was tracking ahead of its expectations for the full year, amid a surge in demand for health and cleaning products such as Dettol during the Covid-19 crisis. Pre-tax profit for the six months through June increased to £1.44bn, up from £1.26bn on-year, as revenue rose 11% to £6.91bn.
Covid-19 general news
Global cases reached 16.4 million with 654,000 deaths.
The world’s biggest Covid-19 study got underway in the US yesterday, The National Institute of Health is teaming with the Moderna to test approx 30,000 volunteers in what is described as Phase 3 trials. A British researcher said the effectiveness of vaccines will probably depend on annual doses.
Labour’s shadow home secretary has said there were serious questions about the blanket self-isolation requirement on those returning from Spain and the chaotic decision making that provided less than 24 hours notice. The UK Government is in talks with Spain about introducing air bridges with the Balearic and Canary Islands. An air bridge would mean people arriving from the islands would not have to quarantine for 14 days after rules changed this weekend. The travel industry is hoping ministers make a decision by Friday.
Spain has responded angrily to the blanket ban as although there has been a spike in mew cases, theses spikes appear to be localized to specific regions.
Hong Kong is banning gatherings of more than two people and dining in restaurants, to stem the return of covid-19. Yesterday it recorded 145 cases of the disease, a new daily high.
Republicans in the USA’s Senate proposed a $1 trillion covid-relief plan that would cut weekly supplemental unemployment benefits from $600 to $200 through September, when states could adjust benefits to match up to 70% of claimants’ previous incomes. The current $600 payments, part of an emergency stimulus package passed in March, expire this week; the Democrats want them extended through the year in their own $3.5 trillion proposals. The republican plan would also send $1,200 payments to most Americans and shield businesses, schools and other organizations from lawsuits stemming from coronavirus infections.
President Donald Trump’s national security adviser, Robert O’Brien tested positive for covid-19.
Google has asked its 200,000 employees and contractors to keep working from home until July 2021.
Belgium will allow each household to have leisurely contact with no more than five other persons for the next four weeks starting Wednesday.
Markets.
After last weeks moves, the FTSE treaded water yesterday, down marginally in moves that mimicked the continent. Airlines were hit again after the government imposed a 14 day quarantine on tourists returning from Spain. However overnight the US markets bounced upwards with the S&P rising 0.74% and the NASDQ up 1.67%. The Pound is again approaching 1.29 US dollars and 1.10 Euros. Oil prices edged lower, as rising covid cases and tensions between the United States and China clouded the outlook for oil demand recovery.
Gold surges to an all-time high
Gold prices record rally is moving close to the psychologically key $2,000 level, powered by investors seeking cover from COVID-19’s global economic toll, as reflected in dollar weakness, faltering stocks and US-China trade tensions. The safe-haven asset has risen by two-thirds in just under two years. Mounting tensions between the United States and China and worrying rises in coronavirus infection rates have sent the price of gold to an all-time high of $1,943.93 per ounce. Silver is also at its highest level since September 2013, jumping more than 6% yesterday to $24.36 an ounce.
Stamp duty cut only benefiting London
Rishi Sunak’s stamp duty cut has so far benefited London’s property market but had little impact elsewhere so far, according to Zoopla. In a reflection of the disproportionate benefit for wealthier buyers, the property website said agreed home sales in the capital rose by 27% in the first two weeks of the stamp duty holiday. UK house prices rose 0.2% in June as a jump in demand for houses outstripped a fall in the number of sellers, the figures also showed.
Progress on diversity in top roles stalls
Research carried out by Green Park, an executive search and diversity consultancy, reveals that less than 5% of the most senior jobs in the UK are held by people from ethnic minorities. The top roles in 39 areas including central and local government, public bodies, the private sector, universities, sporting organisations and charities were examined and fifteen were found to have no ethnic minority representation at the top at all, while five had seen a decrease since 2017 and in more than half there had been no change. Green Park says the figures have barely changed in the three years since its last survey, despite pledges from government, the public sector and business to make corporate leadership more diverse.
Funding Circle’s chance to prove market sceptics wrong
The Times’ James Hurley speaks with Funding Circle founder and CEO Samir Desai about the company’s progress and the dim view the market has taken recently of online lenders. Mr Desai says the coronavirus pandemic presents an opportunity to prove Funding Circle can be counter-cyclical and that he wants investors to understand the company is heading in the right direction even if that is not yet reflected in the share price. “The business is nearly twice as big as it was when we floated, we’ve done twice as much lending. We’re helping a lot more small businesses, we’re delivering a lot,” Mr Desai says. UK managing director Lisa Jacobs adds that the business model was almost built for remote working and that Funding Circle maintained 100% productivity when everyone started working from home.
Winfresh enters administration
Essex-based fruit distributor Winfresh has entered administration, with Duff & Phelps working with customers and suppliers as the short-term future of the business is considered. “In recent years the UK banana market has become highly competitive and that has impacted the company in terms of volume and pricing. As a result, the financial position of the company has become untenable and mounting cash flow pressures has resulted in the appointment of the joint administrators.”
Downing Street drafts plans for integrated social care
The NHS in England could assume control of social care, under plans being examined by ministers. The move would see responsibility removed from local councils, along with the £22.5bn in annual funding, swelling the NHS budget to £150bn. Downing Street has drafted in David Cameron’s former policy chief Camilla Cavendish to help finalise proposals for a fully integrated health care system. The news comes after reports that ministers were considering a new tax on the over-40s to pay for social care.
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