New budget coming – business news 13 November 2020.
James Salmon, Operations Director.
A new budget is coming in March, threatening tax rises, while other giveaways are hinted at plus 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.
Treasury permanent secretary: New Budget to come in March
The Treasury’s permanent secretary says the Chancellor will announce a New Budget in March as part of plans to raise income tax.
Speaking at a Public Accounts Committee meeting on the government’s furlough scheme, Tom Scholar said: “There will be a Budget in March. We know a lot will change between now and March we’ll know a lot more about the pandemic.”
“We have to have a Budget before the end of the financial year otherwise the Government can’t continue to raise income tax”.
The UK’s Budget deficit is expected to swell to £400bn this year, amid forecasts that the pandemic will push the country into a double-dip recession. The Government’s tax advisory body has urged the Chancellor to roll out a tax raid on buy-to-let properties and other forms of wealth in a bid to shore up more than £14bn to help repair the UK economy. The permanent secretary’s comments are the first clear signal that significant income tax hikes lie on the horizon.
Rishi Sunak extends investment relief for manufacturing firms
The Chancellor is to extend a temporary £1m cap on tax relief for manufacturing firms on investments in plant and machinery until January 2022. The annual investment allowance break had been due to end on January 1 when the cap would have reverted to £200,000.
Chancellor hints at new giveaways
Rishi Sunak has hinted the Government could take steps to boost consumer spending in the run-up to Christmas, telling Sky News that “we’ll look at a range of things to see what the right interventions are at that time”. He added: “We’ll talk about specific measures, but more broadly I think it’s right when we finally exit this [lockdown] and hopefully next year with testing and vaccines, we’ll be able to start to look forward to getting back to normal.”
Economy grows by record 15.5%
As first mentioned yesterday, official data shows that the UK economy grew at a record pace in the third quarter of the year. The country’s emergence from the first lockdown saw GDP rise by 15.5% between July and September. However, growth was weaker in September than in the preceding months, while the country’s economy is still 8.2% smaller than before the virus struck. Despite the rebound in July to September, analysts warned that the economy was likely to shrink again in the final three months of the year because of the impact of renewed lockdowns in different parts of the country
Government pays out £359m to staff at insolvent businesses
The National Insurance Fund has paid out in the last quarter more than £1.3 million a day in redundancy payments to employees at insolvent companies according to new figures.
Payments totalled £114.46 million in the three months to September 30 2020, adding to the £244.16 million paid out in the first half of the year.
The Insolvency Service, an agency of the Department for Business, Energy and Industrial Strategy (BEIS) which runs the scheme, handed the money out to workers made redundant after their employer entered into either administration, liquidation, a CVA or another form of corporate insolvency.
Covid-19 general news
The UK added 33,470 new cases yesterday, the highest number since the start of the pandemic, to bring the total to 1,290,195.
Globally 606,497 new cases were added bringing cases above 52.5 million and deaths rose to 1,293,847.
GlaxoSmithKline and Canadian biopharma firm Medicago announced the start of phase 2 and 3 clinical trials of a Covid-19 vaccine candidate. The trials will seek to evaluate the potential vaccine’s efficacy, safety and its ability to provoke an immune system response.
While progress on vaccines is causing much cheer, many questions still remain unanswered. How long does the protection last for? Does it prevent all symptoms? Do the vaccines stop those vaccinated from spreading the virus? Which groups will the vaccine not work for? How will it cope with mutations? How long before the vaccines are widely available? How long before enough of us have been vaccinated that we can start to loosen restrictions? The answers to those questions are going to take time to answer and in the meantime we must still live with the pandemic.
Three top central bankers warned that market euphoria over a potential Covid vaccine may be premature. The Bank of England’s Andrew Bailey called recent vaccine news “encouraging” and said he hoped it would reduce uncertainty but added “we’re not there yet.” The ECB’s Christine Lagarde said while it’s now becoming possible to see past the pandemic. US Federal Reserve chief Jerome Powell said Thursday that it is “too soon to assess” the potential impact of a coronavirus vaccine on the economy in 2021, despite recent announcements that have stoked hopes. “This is certainly good and welcome news for the medium term,” Powell told a virtual conference organised by the European Central Bank. but added “I don’t want to be exuberant.” said challenging months could be ahead, with a further spread of the disease posing the largest risk to the U.S. economy’s “solid path of recovery.”
Markets.
European equity markets traded lower yesterday, as investors booked profits following strong gains earlier in the week. Also GlaxoSmithKline and Royal Dutch Shell went ex-dividend hitting the FTSE 100 which fell 0.7%. European markets were down and the Eurostoxx 50 fell 1.13%. US Markets fell as rising numbers of Covid-19 cases raised concerns over the health of the economy heading into year-end. Overnight in the US, the DOW dropped -1.08%, the S&P 500 dropped -1.00% and the NASDAQ dropped -0.65%. Asian Markets were mixed as Covid-19 cases continue to surge in the US, dimming optimism from positive vaccine news.
Stirling sold off yesterday in response to the weaker than expected Q3 GDP figures. Oil fell and Gold rose as as market optimism over a potential Covid-19 vaccine gave way to concerns over the logistics of its eventual roll-out
New claims for jobless benefits in the uS dropped by 48,000 last week, to 709,000. It still dwarfs than the pre-pandemic average of 200,000 a week, but it was slightly better than expected, given that the US is in its third wave of covid-19 cases and adding 150,000 infections a day.
Second lockdown puts Caffe Nero on brink of ruin
Caffe Nero has entered into a Company Voluntary Arrangement with KPMG hired to advise. The move was triggered by the second lockdown, said founder Gerry Ford. The chain has suffered from curbs on socialising, fewer shoppers in town centres and the government advice for workers to stay away from their offices. Will Wright, head of regional restructuring at KPMG, said: “Caffe Nero is an iconic brand on the UK’s high streets with a terrifically loyal customer base. However, like many others across the sector, the impact of measures introduced in response to the COVID-19 pandemic has been devastating.”
Sunak warned off CGT move
Rishi Sunak has been warned that a move to align capital gains tax with income tax will elicit a furious response from entrepreneurs with business leaders warning any recovery would be stifled and innovators would flee the UK. Lord Leigh of Hurley, senior treasurer of the Conservative Party and a senior partner at Cavendish Corporate Finance, said: “Proposals to simplify tax by equating income and capital don’t reflect the differences between the two. Capital gains are rewards for a risk taken by investing in an asset which might become worthless. Income involves no risk at all. If you want people to move from a comfortable salary to invest in a new business, take a risk, employ people, as I did, they have to feel that tax on any success reflects that risk.” Elsewhere, the Centre for Policy Studies and the Centre for Policy Studies both said the plans were ill-advised. The Telegraph’s Jeremy Warner asserts that tax re form that undermines growth “merely leaves the Exchequer with a greater share of a shrinking pie, and is therefore ultimately at best a zero sum game.” Finally, in a letter to the FT, Andrew Joy asserts that what the proposers are really after is a wealth tax, but “CGT is a rotten proxy”. Equalisation is a “seductive but dangerous chimera,” he adds.
FRC sets out company reporting expectations
The Financial Reporting Council (FRC) has published its annual end of year letter to CEOs, CFOs and Audit Committee Chairs setting out its reporting expectations for preparers of reports and accounts for the year ahead. The FRC said this year’s letter is of particular significance given the continuing backdrop of economic uncertainty and the impact of COVID-19 on the scope and timing of company reporting, while companies are also dealing with commercial and operational change associated with the UK’s exit from the EU. The letter covers what disclosures should be made to understand the impact of particular events on the company’s position and financial performance, as well as any judgements involving significant estimation uncertainty. The FRC expects increased disclosure of relevant sensitivities or ranges of possible outcomes to help users understand the assumptions underlying those estimates and the extent of the changes that might be reasonably possible in the next twelve months. The regulator also outlines its expectations of companies’ climate disclosures including the impact of climate change on their activities, their own environmental impact as well as explanations of how directors are discharging their section 172 duties.
Green business reporting rules at risk of pale response
The UK aims to become the first country in the world to require climate risk disclosures across the economy. However, critics have questioned whether the rules will make enough difference to investors.
Industry calls for crackdown on ‘dangerous’ clone scams
Finance experts have called for action to tackle clone scams, after analysis from Quilter revealed that an average of 45% of all warnings from the Financial Conduct Authority since 2015 involved the ‘clone’ of a financial services firm. Tom Selby, financial analyst at AJ Bell, warned that trust in financial services and saving would be “eroded” if an increasing number of people fell victim to scams.
Letter: Job retention must be the aim in Brexit countdown
Recruitment & Employment Confederation CEO Neil Carberry urges the Government in the financial times to reduce employers’ NICs to help struggling businesses retain jobs and encourage hiring.
CGT plan would spark second-home fire sale
Following recommendations from the Office of Tax Simplification that the Chancellor equalise capital gains tax and income tax as part of efforts to pay for the Government’s response to the pandemic, experts have warned the move could crash the property market by sparking a fire sale of second homes and investment properties. Jonathan Schuman of Luton landlord Magnet Properties said small buy-to-let landlords would be hit hardest after already enduring stamp duty hikes and the loss of mortgage interest relief. Mr Schuman said: “It will massively distort the market. Landlords will be rushing to sell before the capital gains tax (CGT) rise, but after, higher taxes would be a big incentive to hold on to properties.”
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 extra 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.
Keep up to date with the latest news by following us on social media:-
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.