SMEs optimistic over recovery – business news 19 August 2020.
19 August 2020.
James Salmon, Operations Director.
SMEs optimistic over recovery, Emergency schemes provide £53 billion, inflation increases, savings fall and lots more covid-19, business and market 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.
SMEs optimistic over recovery
Research from digital bank Starling and the Great British Entrepreneur Awards shows that 80% of UK SMEs are confident they will recover from the coronavirus crisis.
Optimism has increased among business leaders, with 75% of SME owners polled saying they feel more confident than they did a month ago.
Some 68% believe they will return to pre-crisis levels or better by 2021. On the financial hit from the pandemic, it was found that 63% of SMEs have seen a decline in revenue, with 19% making no profit at all during lockdown.
Just over a fifth of firms are not confident they can pay their bills each month, while 30% of bosses have used their own money to keep the business afloat. One in five of the 314 small business leaders polled have considered closing as a result of the pandemic.
Emergency schemes provide £53bn in loans
Figures from the Treasury show almost £53bn of credit has been issued through the Government’s emergency coronavirus lending schemes, with more than 1.23m businesses benefitting.
The bounce back loan scheme, under which the government backs 100% of loans up to £50,000, has seen by far the most use
Around £35.5bn has been approved through the bounce back loan scheme for small companies, with £13.7bn provided to businesses through the coronavirus business interruption scheme, while a version for large companies has handed out £3.5bn.
Stephen Pegge, managing director of commercial finance at UK Finance, said that the schemes are part of a “broader strategy for supporting the nation’s enterprises”, adding that they operate alongside commercial lending, capital repayment holidays, extended overdrafts and invoice finance facilities.
The Times notes a recent report from the EY and The City UK which suggests SMEs will accumulate about £100bn worth of unsustainable debt by March 2021.
Inflation
UK Inflation jumped unexpectedly to 1% in July from 0.6% in June amid a surge in global energy prices and increased retail activity, the Office for National Statistics has said. The consumer price index inflation reading was the highest since March and markedly higher than the 0.6% analysts had predicted.
“Prices for private dental treatment, physiotherapy and haircuts have increased with the need for PPE contributing to costs,” the ONS said.
The ONS said the figure was boosted by rising petrol and clothing prices.
The Bank of England said earlier this month that it expects inflation to drop again soon.
It could fall to -0.3% in August, the central bank said.
“Inflation has risen, in part, due to the largest monthly pump price increase in nearly a decade, as international oil prices rose from their lows earlier this year,” said Jonathan Athow, deputy national statistician for economic statistics at the ONS.
Core inflation rose to 1.8% from 1.4%. That measure excludes energy, food, tobacco and alcohol prices, as they are considered volatile.
The rise was a surprise to economists, said Neil Birrell, chief investment officer at money manager Premier Miton. “It’s a bit early to call the return of inflation, but it does show that there is activity in the economy,” he said
Savings rates hit record lows
Savings rates have hit a record low, with figures from Moneyfacts showing that the average easy access rate is now 0.22%, down from 0.56% in March after five consecutive months of declines. All major providers, including HSBC and NatWest, now pay 0.01% on easy access accounts. The average one-year fixed rate Isa currently pays 0.56% compared to 1.14% in March, while the average easy access Isa offers 0.32%, down from 0.83%. Bank of England figures show £45.3bn was deposited into easy access savings accounts in the four months to the end of June, up from £5.7bn in the same period last year.
Eat out Scheme
More than 35m meals have already been claimed on the Eat Out to Help Out scheme, according to the Treasury. Restaurants, pubs and cafes have so far submitted more than 35m claims to the government for meals that have been discounted under the programme.
Reflecting on the recovery
Paddy Lillis, general secretary of the USDAW union, has called for the Government to deliver a recovery plan to support a retail sector that was “already struggling before the coronavirus emergency” and has been hit hard by the pandemic. He calls for a fundamental reform of business rates and for tax law to be reworked to ensure companies pay their fair share of tax. Citing a need to create a level playing field between online and high street retailers, he argues that tackling tax avoidance and the use of offshore havens must be prioritised.
Shop trips climb but mask rule hits visits
The UK Grocery Market is easing from the heights of the lockdown period, data from research agency Kantar showed yesterday.
Data show that consumers are visiting supermarkets and grocery stores more regularly than at the height of the COVID-19 pandemic but are spending less on each trip.
Customers spent £9.7bn over the past four weeks, the lowest level since February. However, this still remains well above pre-pandemic levels. The average spend per trip of £24 was the first dip below £25 since March but still exceeds the pre-pandemic average of £19.
Analysis suggests that the introduction of a rule saying shoppers must wear masks drove a decline in visits to stores, with 2m fewer supermarket trips in the week after the rule was rolled out than would have normally been expected.
Meanwhile, a sales monitor produced by the Scottish Retail Consortium and KPMG reveals that total sales in Scotland fell by 8.3% during July, compared with the same month in 2019. Paul Martin, UK head of retail at KPMG, said: “The latest figures highlight the scale of the challenge ahead for Scotland’s retailers.”
M&S announces job cuts
Marks & Spencer has said it will cut 7,000 jobs over the next three months as the retailer overhauls its business in the latest sign of how the coronavirus pandemic has disrupted the high street. M&S has recently announced an acceleration of restructuring plans designed to create a “leaner, faster” business. Julie Palmer, a restructuring expert at Begbies Traynor, said the announcement “will rock the retail sector”.
Vacancies increase
Figures from the Institute for Employment and the Joseph Rowntree Foundation show there were 169,000 new vacancies available in the first week of August, a 50% increase on the levels reported in July but around a third down on those seen a year ago.
Almost 25k jobs lost in a month
Nearly 25,000 people have lost their jobs with major UK employers within the last month, according to ITV News analysis. The report says 24,447 jobs have been lost since July 17, while 41,500 staff have been let go by major employers since the country went into lockdown in March. Figures from the Office for National Statistics highlight the scale of job losses across businesses of all sizes, with 730,000 people taken off payrolls since the beginning of the COVID-19 crisis in March.
UK faces white-collar jobs crisis as pandemic ends decades of job security
Tej Parikh, an economist at the Institute of Directors, has warned that the livelihoods of many workers are at risk in the worst recession since the early 1990s.
Office workers wary of full-time return
A study by property consultancy Spacemade has found that 43% of London workers surveyed said they want to be in a local workspace some or all of the time, rather than commuting into the centre of the city every day. Only 7% had chosen to return to an office full time with no option of remote working after lockdown was eased.
PwC staff keen to return to offices
Kevin Ellis, chairman of PwC, has told City AM in an interview that while staff at the firm had adjusted to working remotely, the role of the office remained important. He noted that the general view among workers appeared to be that staff wanted the opportunity to return to office work, commenting: “We’ve been led by our people and the overriding message is that just because you can work from home doesn’t mean you should.”
Covid-19 general news
Global virus cases topped 22 million, with the U.S., Brazil and India accounting for more than half the total.
225,096 new cases were added globally with deaths rising to 781,139
The government is looking at testing people at airports in order to ease the requirement for quarantining
U.S. President Donald Trump said he called off last weekend’s planned trade talks with China because Beijing’s handling of the virus was “unthinkable.”
Markets.
The FTSE 100 fell 0.8% yesterday, retreating as the Pound strengthened against the dollar on doubts about the outlook for a U.S. economy that is still struggling to recover.
Meanwhile, in the US the S&P 500 closed at a record high of3,389.79. It had reached its previous peak on 19th February before the pandemic hit the economy. The index has risen by more than 50% since the low of 23rd March, and has been largely driven by a rush of capital into big tech giants. European equities however are stuck near the same levels they were at two months ago.
On the other hand the US dollar fell to its lowest in two years against leading currencies, as lawmakers are yet to agree on covid-stimulus measures to support the fragile economy. The pound buys 1.325 US Dollars.
Oil Prices eased this morning on concerns that U.S. fuel demand may not recover as quickly as expected amid stalled talks on an economic stimulus package, overshadowing a bigger-than-expected drawdown in U.S. crude stocks.
Gold Prices fell below $2,000 an ounce today as the dollar steadied, with investors awaiting minutes from the U.S. Federal Reserve’s last policy meeting.
Millennials hit by higher income tax bill
Analysis by UHY Hacker Young shows that millennials – people between 23 and 39 – saw a 13.4% increase in their income tax bill last year, with taxpayers in that age band paying a combined £34.4bn. It is suggested that the increase probably stems from the youngest members of the generation graduating into the workforce combined with career and salary progression of the oldest people in the millennial bracket. UHY Hacker Young partner Neela Chauhan warns that young people are likely to see rising taxes in future, especially in the wake of the COVID-19 crisis, saying: “Massive coronavirus stimulus measures will have to be paid for at some point and it is likely that this will be done through higher future tax rates. This means that millennials and Generation Z will pick up most of the tab”. Calling on ministers to help ease the burden on millennials, she suggests the Government needs to review income tax brackets more regularly
HMRC issues tax debt guidance
HMRC has published two policy papers ahead of a critical period for many taxpayers, with deferred income tax self-assessment and VAT liabilities due in early 2021. The tax office’s “How HMRC treats customers who have a tax debt and How HMRC supports customers who have a tax debt” offers guidance for taxpayers who find themselves having difficulty paying their tax. Meanwhile, the Tax Faculty has published guidance on negotiating time to pay, stressing the importance of early contact as this establishes an inability to pay and acknowledgment of a need for support, rather than a refusal to pay. Analysis shows that HMRC typically has more than half a million arrangements in place at any one time, with nine out of ten of these completing successfully.
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