Latest Business News
23rd October 2019.
James Salmon, Operations Director.
INDUSTRY
Auditors ‘complicit’ in Thomas Cook collapse
MPs on the Business, Energy and Industrial Strategy Committee have heard from Thomas Cook’s former auditors. The hearing saw the Committee accuse PwC and EY of being complicit in the failure of the tour operator, questioning why accounts were signed off when the board had been told of risks to the firm’s financial stability and concerns over some accounting practices were raised. Pointing to EY signing Thomas Cook off as a going concern just six months before it went bust, MP Peter Kyle said that he found it “inconceivable” that the evidence available “pointed towards a sustainable business.” PwC faced questions over a potential conflict of interest after earning around £4m from advising Thomas Cook’s remuneration committee as well as being its external auditor. PwC head of audit Hermoine Hudson said the audit and consultancy businesses were independent at the time, so there was no conflict. With PwC no longer advising for its audit clients because of new regulations, Committee chair Rachel Reeves said: “The behaviour of your firm and the other big audit firms only changes because the rules change.” Ms Reeves also warned that accountancy firms have not shown a “learning curve” from the collapse of several large companies. She asked: “How many more cases of egregious accounting do we need before your industry opens its eyes and recognises that you are complicit in this and that you need to reform?” She added that legislation is needed to deliver tougher regulation as the industry “is not willing to make the changes needed.”
The Daily Telegraph, Business, Page: 3 The Times, Page: 38 Daily Mail, Page: 73 Financial Times, Page: 22 The Guardian, Page: 37 The I, Page: 38 The Independent, Page: 55 Daily Star, Page: 4 Daily Mirror, Page: 14 City AM, Page: 5 Yorkshire Post, Page: 2 Evening Standard Sky News
FRC: Firms falling short on climate reporting
A report from the Financial Reporting Council (FRC) warns that businesses are falling short of investors’ expectations for clearer reporting on climate-related issues, saying that “while reporting on climate change is an evolving practice, expectations are changing rapidly”. FRC chief executive Sir Jon Thompson commented: “Investors are rightly demanding more information and greater transparency from companies on the challenges posed by climate change.”
The Times, Page: 45 City AM
TAX
Chancellor set to drop tax cuts
Chancellor Sajid Javid is set to opt for public spending over tax cuts in his budget, putting plans to cut tax bills of people earning more than £50,000 a year on hold. A Treasury official said: “Public sector finance figures mean we need to be realistic about how much space we have and whether now is the time for sweeping tax cuts.”
The Times, Page: 2 The Guardian, Page: 37 Financial Times, Page: 2
Nobel prize winner points to tax cut myth
Abhijit Banerjee, winner of the Nobel prize for economics, says raising taxes rather than tax cuts drives economic demand. He suggests that reducing taxes to boost investment is a myth spread by businesses, saying: “You are giving incentives to the rich who are already sitting on tons of cash.” He added: “You don’t boost growth by cutting taxes, you do that by giving money to people … Investment will respond to demand.”
The Independent, Page: 54
CORPORATE
Insolvencies up in Q3
Analysis by KPMG shows that the number of companies entering administration rose by more than a third during Q3. A total of 417 companies went into administration between July and September, compared with 310 in Q2 and 322 during Q3 2018. The number of retailers going into administration fell from 26 in the second quarter to 18 in Q3, while the number of firms in the building and construction sector falling into administration rose from 49 in Q2 to 76 in the last three months, with failures in the property sector climbing from 18 to 33. Blair Nimmo, head of restructuring for KPMG, said: “For some time now, corporate insolvencies have been ticking along at fairly steady levels, so the more marked increase in administrations seen last quarter may herald the start of a new wave of activity.” He noted that firms are “proactively addressing long-term issues and attempting to place themselves on a more sure financial footing,” highlighting the use of CVAs and refinancing.
The Daily Telegraph, Business, Page: 7 The Guardian, Page: 37 The I, Page: 41 City AM, Page: 7
Taxman homes in on Airbnb
Home rental website Airbnb is facing a HMRC investigation, with the firm saying the probe is related to how it calculated its tax bills and payments it made to other parts of the business. Airbnb Payments UK, which handles money paid by hosts and guests, had revenue of £273m in 2018, £1.2m profit and paid £235,000 tax
Daily Mail, Page: 73
The loneliness of the long-distance chief executive
Brooke Masters looks at the pressures faced by executives based far from their companies. She notes Deloitte analysis showing that median UK CEO pay was £3.4m in 2018, down from £4m in 2017.
Financial Times, Page: 15
FIRMS
Deloitte accused of pure corruption in Eskom deals
South African state power monopoly Eskom has launched legal action seeking $14m from Deloitte over allegedly overpriced contracts, with Deloitte saying it “disagrees with and disputes” the claims.
Financial Times, Page: 6
FT Intelligent Business
The FT carries its Intelligent Business supplement, with features including a look at Deloitte, PwC, EY and KPMG’s legal services and strategies within the sector and a discussion on technology in the legal profession which cites PwC research showing how large law firms have identified technology as the most significant challenge facing the industry in 2019-2020. It also looks at the insurance industry, noting Deloitte analysis suggesting about $2.6bn was invested in insurance tech businesses in 2018 .
Financial Times, FT Intelligent Business
PROPERTY
Commercial rental values climb 0.4%
Rental values in the UK prime commercial property market rose in Q3, CBRE figures show, with the increase driven by a strong performance in the industrial sector. Commercial property values were up 0.4%, with industrial and office rental values rising 1.7%. Wwhile retail rental values continued to fall, there was a slowdown in the decline, with values down 0.8% compared to 1.1% in Q2. Robin Honeyman, senior research analyst at CBRE, said: “Third quarter results across the main sectors continued the trends seen in 2019 so far.”
City AM
More homes sold in September
HMRC figures show that the number of homes sold in Britain rose in September, with 101,740 transactions recorded. This was 5% up on August and 2.3% higher than September 2018. Jeremy Leaf, a former chairman of the Royal Institution of Chartered Surveyors, said the increase showed the “relative resilience of buyers and sellers” despite “political distractions”.
The Times, Page: 44
ECONOMY
Government borrowing climbs
Office for National Statistics data shows that public sector borrowing rose by a fifth during the first half of the financial year, hitting £40.3bn in the six months to September. This marks a £7.4bn increase on the same period in 2018. For the month of September, borrowing stood at £9.4bn, exceeding the £8.8bn recorded in September last year. John Hawksworth, chief economist at PwC, said the figures show public finances “heading further into the red”, adding: “This borrowing overshoot will not make the chancellor’s choices any easier as he heads towards his first Budget on 6 November.” Thomas Pugh, UK economist at Capital Economics, commented: “September’s better-than-expected public finance figures do not change this year’s overarching themes of higher spending and borrowing.” He added that the data “will only encourage the Chancellor to loosen fiscal policy at the Budget next month.” Sumita Shah at the ICAEW offered: “We are on course for a bigger deficit and higher debt this year than originally expected, with the half-year deficit only £1.1bn short of the deficit for the whole of last year.”
The Times, Page: 36 The Daily Telegraph, Business, Page: 3 The Guardian, Page: 37 Daily Mail, Page: 73 BBC News
Manufacturing firms’ planned investments fall
British manufacturing companies saw orders for products fall at the fastest pace in almost 10 years while output fell after stagnation in the quarter to September. This comes as firms’ projected investment for next year is also at the lowest rate since the financial crisis, according to the CBI’s industrial trends survey. Howard Archer, chief economic adviser to the EY Item Club, said the “dismal” findings show “the manufacturing sector struggling markedly in the face of soft domestic and foreign demand”.
The Guardian, Page: 37 Daily Mail, Page: 73 City AM
OTHER
Climate concern climbs
A poll of 1,300 people commissioned by Deloitte and public services think-tank Reform saw 51% say they are worried that climate change and other environmental problems will get worse – up from 37% a year ago.
The I, Page: 11
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 you 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.
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