Jobs Support Scheme – business news 25 September 2020.
James Salmon, Operations Director.
The Jobs Support Scheme, living with coronavirus without fear, the national debt, other business support, 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.
Jobs Subsidy Scheme
Rishi Sunak launched a scaled-back jobs support scheme but warned not everyone could be helped during this economic crisis. Sunak said the new scheme would “support only viable jobs” as opposed to jobs that only exist because the government is continuing to subsidise the wages.
The new “jobs support scheme” , which will see the government support the wages of people working part-time from November in a bid to stave off mass unemployment. The scheme, described by Sunak as a “radical intervention into the UK labour market”, will allow full-time workers to go back to work part-time and have the government help pay for two-thirds of hours they have lost.
Chancellor Rishi Sunak has vowed that he is willing to extend his newly announced wage subsidy scheme if a further national lockdown is implemented. Yesterday, Sunak launched the Jobs Support Scheme, which will allow full-time workers to go back to work part-time and have the government help pay for two-thirds of hours they have lost.
The scheme, which will run for six months, will subsidise the pay of employees who are working fewer than their normal hours due to lower demand. Employers will pay for the hours actually worked and one third of the wages lost. The Government will pay for another third of the lost pay while the employee will forego the final third.
Only staff who can work at least a third of their normal hours will be eligible for the scheme.
Large companies applying for the scheme will need to show that their turnover has been affected by the pandemic.
Paul Johnson, director of the Institute for Fiscal Studies, said the Chancellor was “trying to plot a difficult path between supporting viable jobs while not keeping people in jobs that will not be there once we emerge from the crisis”.
Mr Sunak’s new wage subsidy scheme will slash state support from 60% per job at the end of October, when the furlough scheme ends, to a maximum of 22%.
Separately, the Government announced fresh support for self-employed workers but only at 20% of average monthly trading profits, down from 70% before.
Mr Sunak’s move was praised by the Trades Union Congress, the Confederation of British Industry and the British Chambers of Commerce, which said the plan was a “shot in the arm” for businesses.
However, Mike Cherry, chairman of the Federation of Small Businesses, said: “The Chancellor had nothing to say for those left out of the first round of support measures – not least the newly self-employed and company directors.”
Douglas Grant, Director of Conister, said: “Yesterday’s announcement from Rishi Sunak will be welcome news for millions of people and provide vital relief for SMEs across the country. The extension to the Government’s business loan schemes and their repayment terms as well as unprecedented support for jobs is no small undertaking and will keep viable UK businesses afloat.
“Mainstream banks and alternative lenders must work together with support from the Government to keep a constant drip feed of capital to UK businesses. SMEs have shown an incredible amount of adaptability and resilience in the face on changing consumer behaviour. As such, it is critical that economic and monetary stimulus in tandem with government schemes work in partnership with specialist lenders to continue to support the sector so that we can avoid the downward spiral of output and job losses.”
Hawkish Sunak says we must learn to live with virus “without fear”
Rishi Sunak urged the nation to live with coronavirus “without fear” yesterday when he launched his winter economy plan.
The Chancellor said Britain can no longer put normal life on hold, adding that the country could not carry on ignoring the economic impact of the pandemic.
Pointing out that “the price our country is paying is wider” than the coronavirus death toll, he added: “As we think about the next few weeks and months, we need to bear all those costs in mind.”
The Telegraph’s Camilla Tominey says this has been interpreted as a message to Boris Johnson and the Health Secretary, with one senior parliamentarian saying: “The message was clear – we cannot gamble any further with the economy.”
The Chancellor admitted the economy was now “likely to undergo a more permanent adjustment”, with some jobs disappearing for good. Mr Sunak suggested his wage subsidy scheme could cost £300m a month, compared with £6bn a month for the furlough scheme.
Pension contributions left out of jobs support scheme
The Treasury has confirmed that its new Jobs Support Scheme will not cover employer pension contributions, which has raised concerns about how employers will comply with auto-enrolment obligations. Under the new scheme, unveiled by Rishi Sunak yesterday, the Government will not cover pension contributions or class one employer NI contributions, which will remain payable by the employer.
National debt
The UK Government borrowed £35.9bn in August as tackling the economic fallout of pandemic took its toll on the public finances, official figures show. The figure – the difference between spending & tax income – was £30.5bn more than it borrowed in August last year.
Assessment and VAT extensions granted
As part of the Chancellor’s winter economic plan, self-assessed income taxpayers can extend their outstanding tax bill over 12 months from January.
Rishi Sunak also announced that restaurants, hotels and cinemas would continue to pay VAT at 5% rather than the usual 20% until March 31 next year.
The Chancellor suggested after his Commons statement that there would have to be tax rises in the long term to help balance the books. He said: “We need to have an eye on our public finances and make sure we stay in a strong and sustainable position. I will have to make some of the difficult decisions in the future as we get back on a path to sustainability.”
He went on to say that a smaller state would be ideal following the crisis: “The state being as nimble and agile as possible means it doesn’t have to raise as much tax revenue from people and people can keep more of the money they own. That is in general a good thing. As we g et through this we can get back to a normal situation.”
Government to launch ‘Pay As You Grow’ loan payback scheme
The Government is to launch a ‘Pay As You Grow’ loan payback scheme to provide flexibility for businesses who took out loans amid the coronavirus crisis.
Speaking in the Commons on Thursday, Chancellor Rishi Sunak said the repayment time will be extended from six years to a decade, nearly halving the average monthly repayment. He added that businesses can now choose interest only loans and that those who take on the initiative will not see their credit rating affected.
The Government is also starting work on a successor loan plan to begin in January. The application deadline for coronavirus loan schemes has been extended to November.
Charlotte Crosswell, chief executive of Innovate Finance, which represents fintech and non-bank lenders, said she was “encouraged” by plans for a “long-term solution for SME financing.”
Elsewhere, Miles Celic, chief executive of TheCityUK, said the loan extensions would help “to preserve many viable firms, allowing them the chance to return to growth after the pandemic has passed”.
The next financial crisis may be coming soon
The FT’s Gillian Tett says heightened concerns over an impending financial crisis is hurting business confidence, and a rise in defaults as the coronavirus crisis moves into its insolvency stage could tighten credit conditions
Covid-19 general news
With 361,390 new cases yesterday, cases top 32 million and deaths reaching 983,042. Althoughexperts say the real figures are probably double as many cases are not tested and deaths are not attrributed.
This week has been marked by the realization that Covid-19 and restrictions to control the disease aren’t going away any time soon. Hospitals in Madrid are filling up with seriously ill patients again, and the U.K. has reported its highest number of new coronavirus cases in a single day since the start of the pandemic, though it’s worth keeping the country’s increased testing capacity in mind when making comparisons with the surge six months ago.
France on Thursday saw a record 16,096 and the U.K. had another 6,634, also the highest daily total since the start of the pandemic. Germany reported 2,321 new cases on Friday, the most since April.
In Spain, the pace of new infections slowed with 3,471 new cases in the past 24 hours, but hospitals in the capital are under alarming strain after a surge over the past week.
Markets.
The FTSE 100 fell over 1% yesterday, hovering around the 5800’s as the Chancellor announced his much scaled back jobs support scheme.
US Markets rose slightly as tech shares recovered some of their recent losses while traders weighed the latest batch of economic data. The DOW rose 0.20%, the S&P 500 rose 0.30% and the NASDAQ rose 0.30%.
Oil prices steadied as the bullish impact of a fall in US crude inventories was offset by a stronger US dollar and a renewed wave of covid-19 cases across Europe that led several countries to reimpose travel restrictions and lockdown measures. Gold prices dropped to a more than two-month low, also hurt by a strong dollar, while the lack of additional stimulus measures to aid the global economy dented sentiment further.
Retailers facing £8bn hit as rates holiday ends
Retailers have warned they face an £8bn hit when business rates relief comes to an end. A 12-month pause on shops’ business rates was brought in when coronavirus struck, giving firms vital breathing space after they were forced to close their doors and reopen to far lower footfall than normal. However, Rishi Sunak has not extended the relief and from April companies will have to once again start paying rates based on the rental value of properties last assessed five years ago – many of which will be disproportionately high due to a plunge in the value of high street real estate as shoppers head online instead. The Government has already said that the next revaluation will take place in 2023, meaning firms could be stuck with massive bills for years.
Hauliers hit back at Gove as customs row heats up
Haulage groups have criticised the Government for putting responsibility for avoiding queues of lorries heading to Dover onto them while its new customs IT systems remain incomplete.
The Road Haulage Association and Logistics UK both said it was Michael Gove’s responsibility to give firms the “details of and access to” the promised new IT systems.
Simon Sutcliffe a partner at Blick Rothenberg, said: “It’s all very well for Mr Gove to say that unless the hauliers get their paperwork in order there will be huge delays and confusion at UK ports, but the Government have still not put the electronic systems that they promised in place.”
A HMRC spokesperson said: “The development of border systems necessary for the end of the transition period is on track.”
EU seeks to limit reliance on City post-Brexit
The European Commission has warned that the EU will have problems setting rules and regulations in the financial sector unless it weans itself of its dependence on the City of London for access to capital.
The development of a capital markets union has become more urgent because of Brexit, Valdis Dombrovskis, an executive vice-president of the European Commission said on Thursday.
In a communication to EU governments, the European Commission said: “An enhanced single rulebook and effective supervision will be crucial to prevent regulatory arbitrage, forum shopping, and a race to the supervisory bottom.”
Emma Reynolds of lobby group TheCityUK said: “The UK’s capital markets have been – and will continue to be – essential for firms across the EU seeking to raise capital to fund growth and create jobs. Britain’s financial services industry has some of the highest standards in the world and is clear about maintai ning that position.”
Impersonation frauds soar during pandemic
More than 15,000 impersonation scams were reported in the first half of 2020, according to a new report by trade body UK Finance, an 84% increase on the year prior. Criminals exploiting the increased use of technology among the public during the COVID-19 pandemic stole around £208m from fake government loan forms, phishing emails and bogus websites. Scams listed by HMRC included fake tax rebate links and text messages issuing fake £250 fines for breaking quarantine rules.
Half-year losses triple at UK peer-to-peer lender Funding Circle
Losses at P2P lender Funding Circle almost tripled in the first half of the year to £115m, driven by coronavirus-related write downs. Some investors are set for their first losses.
Brussels ready to clamp down on sweetheart corporate tax deals
Paolo Gentiloni, the EU’s economics commissioner, has said that Brussels wants to pressure capitals to root out “structures that facilitate aggressive tax planning” in order to level-up the single market’s playing field.
10pm closing
Commenting on all pubs, bars, restaurants and other hospitality venues in England closing at 10pm yesterday, Douglas Grant said: “For many businesses operating in the bar, restaurant and other hospitality sectors, the introduction of tonight’s curfew will represent a difficult choice over whether this is sustainable in the long run, especially considering that post 10pm takeaway is said to represent around half of all takings of many hospitality businesses, particularly those selling food and drink.
“In the brewing industry for example, Covid-19 has led to a rethink of their distribution models and we are seeing many brewing businesses now looking to transition from pubs to supermarkets for their distribution. Carbonated beer, for instance, has enjoyed improved sales driven by increased consumer demand at supermarkets. We believe that smaller sized breweries that have adapted to new consumer behaviours will likely weather the crisis and thrive, others should act fast to do the same.
“We are now at a critical point where more resilient sectors, like the brewery industry, are protected by a tripartite level of sustainable support from Government, alternative and traditional lenders working together to ensure their existence is guaranteed. Specialist leasors have been stepping in to help the UK’s brewing industry to resolve some of these issues, enabling brewers to outsource some of their equipment so they can focus on making their products commercially available as soon as possible to capitalise on supermarket distribution and demand.”
COVID-19 is disrupting pensions
Debora Price, professor of social gerontology at the University of Manchester, has warned that COVID-19 has set pensions equality back by a decade. She claimed that any previous improvements to bridge the gender gap in pension provision have now been ruined as a result of the coronavirus pandemic.
Redcentric chiefs charged with fraud
Redcentric’s former boss Fraser Fisher has been charged with two counts of making a false or misleading statement by the Financial Conduct Authority. Timothy Coleman and Estelle Croft, formerly CFO and FD respectively, face the same charges and further counts relating to the firm’s 2015 accounting scandal. The company’s auditor, PwC, has already been fined £4.6m for its work.
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.