Spending Slumps by a third – business news 22 January 2021.
James Salmon, Operations Director.
Spending slumps by a third in latest lock-down, small business owners face mental health crisis, residential transactions surge in December, businesses to spend £7.5bn a year handling customs declarations , 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.
Spending slumps by a third in latest lock-down
Consumer spending has fallen further in the latest lock-down, according to credit and debit card data published by the Office for National Statistics, which showed purchases 35% below their February 2020 average in the week to January 14. Spending on discretionary goods such as cars, clothing and furnishings were hit hardest, the data indicated, tumbling by 49% as the closure of non-essential retail pushed shoppers online. “The data tie in with our view that the economy is going to be hit appreciably more by lock-down and restrictions in Q1 2021 than it was in Q4 2020, but the decline in activity will still be nothing like it was in Q2 2020,” said Howard Archer, the chief economic adviser to the EY Item Club. Yael Selfin, chief economist at KPMG, said that the data underlined the impact of the new lock-down but believed the vaccination programme could offset the damage.
Retail recovery?
UK Retail Sales made a tentative recovery over the Christmas period as the UK emerged from its second national lockdown. Retail sales volumes rose 0.3% in December following a 4.1% fall in November as the country moved into the more relaxed tier restrictions.
UK Government Borrowing
UK Government Borrowing hit £34.1bn last month, the highest December figure on record, as the cost of pandemic support weighed on the economy. It was also the third-highest borrowing figure in any month since records began in 1993, the ONS said..
Scottish small business owners face mental health crisis
Some 40% of Scottish business owners are worried about their mental health amid the economic fallout from the pandemic, according to a survey by the Federation of Small Businesses (FSB). Meanwhile, 55% of the respondents said that they had concerns about the survival of their business. Andrew McRae, FSB’s Scotland policy chair, said: “Speak to any group of people in business in Scotland and you’ll find that the last 12 months has taken a toll on their collective mental health. It is little wonder. They have faced the same life challenges as the rest of the population, with the added pressure of taking endless high-stakes decisions about the future of their business. While we want to see governments in Edinburgh and London take better care of the small business community, we have to take care of each other. That means more people in business seeking out help for themselves or their staff.”
North West administrations fall
The number of North West companies falling into administration fell last year, according to KPMG, as COVID-19 support measures continue to provide a lifeline for those adversely affected by the pandemic. The region is reflective of a trend seen nationally, the firm says, with the overall number of insolvencies down 22% on 2019.
Residential transactions surge in December
UK residential transactions in December were up 13.1% compared to November and were 31.5% higher than in the year prior. The provisional seasonally adjusted estimate of UK residential transactions in December 2020 was 129,400, according to HMRC Property Transaction data. However, HMRC data shows that on an unadjusted basis, a total of 1,047,490 homes were sold in the UK last year, down from 1,176,820 in 2019. Guy Gittens, managing director of London estate agent Chestertons, comments: “With plenty of properties on the market and plenty of buyers still highly motivated to move, we expect this strong market to continue through to the spring.” December’s figures have led to renewed calls for chancellor Rishi Sunak to extend the stamp duty break, which is due to end March 31. Paresh Raja, CEO of Market Financial Solutions, believes an extension to the current deadline could happen but that the chancellor is “unlikely” to scrap stamp duty perm anently.
Businesses to spend £7.5bn a year handling customs declarations
Jim Harra, the chief executive of HMRC, has told MPs that British businesses will spend £7.5bn a year handling customs declarations – as much as they would have done under a no-deal Brexit. He told the public accounts committee that the number of customs forms needed to trade with the EU under the Brexit deal “is not materially different from a no-deal situation”. Mr Harra said revenue estimates from October 2019, which found that the cost of no-deal to UK and EU business would be £15bn a year, still held true under the deal, with half the bill landing on each side. Separately, research by the Chartered Institute of Procurement and Supply reveals 60% of businesses moving goods from the EU to the UK have experienced delays since January 1 due to Brexit red tape and virus restrictions.
Auto Enrollment threshold frozen at £10k
The Government has confirmed that the threshold for UK workers to be auto-enrolled into a workplace pension will remain at £10,000 for the sixth year running. The Department for Work and Pensions said the decision to freeze the threshold reflected the need to balance affordability with giving people the opportunity to build up a meaningful retirement. Aegon Head of Pensions Kate Smith commented: “Freezing the earnings threshold for another year, means that the real value of the threshold has fallen, allowing an estimated additional 8,000 employees to be auto-enrolled into their employer’s workplace pension.”
Covid-19 general news
There were 37,892 new cases in the UK yesterday with 1,290 more deaths.
Globally 630,016 new cases brought the total to 97.1 million with 2,091,849 deaths.
People who deliberately ignore lock-down rules and attend house parties will face new fines of as much as 800 pounds, Home Secretary Priti Patel announced.
“Such irresponsible behavior poses a significant threat to public health,” Patel told a televised news conference in London. “We will not stand by while a small number of individuals put others at risk.”
The U.K. has now administered more than 5 million vaccinations, Prime Minister Boris Johnson said in a tweet yesterday. The government intends to vaccinate about 15 million who are most vulnerable to the disease and carers by mid-February.
Also, in blow to the covid fight, a vaccine factory in Wales producing the AstraZeneca and University of Oxford shot was at risk of flood threats overnight.
A Covid-19 antibody therapy from U.S. firm Eli Lilly yielded optimistic study results as it reduced nursing home residents’ risk of symptoms by as much as 80% when used preventively. While vaccines are clearly the priority, Lilly says the drug, called bamlanivimab, could potentially be a way to protect people in nursing homes during an outbreak when they haven’t yet been vaccinated.
In the US, President Joe Biden announced his national plan with a series of executive actions aimed at overhauling the federal response to the coronavirus outbreak and Anthony Fauci, Mr Biden’s chief medical adviser said he feels “somewhat” liberated working for Joe Biden after Donald Trump tried to sideline him as he announced that America would join COVAX, a global initiative to ensure equal vaccine access co-led by the World Health Organisation.
Markets.
Yesterday the FTSE 100 closed down 0.4% at 6715.42 as it struggled for direction, having opened higher the index then drifted into negative territory towards the close and finished modestly lower while the S&P 500 rose 0.03% and the NASDAQ rose 0.55%. Sterling is at 1.124 Euros and 1.366 US Dollars. Brent Crude is at $55.3 and Gold is at $1860.
The European Central Bank held back from adjusting its pandemic stimulus for the euro zone, even as concerns about new virus variants and slow vaccination drives darken the economic outlook. Having already ramped up support in December, the central announced no changes to its current monetary policy with rates unchanged.
Next
Next has backed out of plans to buy Sir Philip Green’s collapsed retail empire Arcadia Group, potentially putting up to 13,000 jobs at risk. In a statement, the high street chain said it had withdrawn from plans to buy the Topshop owner because it was “unable to meet the price expectations of the vendor”.
Opinion: Workers will pay the price of corporation tax hike
Writing in the Telegraph, Ryan Bourne, the R Evan Scharf chair for the public understanding of economics at the Cato Institute, warns that an increase in corporation tax in March’s Budget would harm business investment and suppress wages. Bourne argues that between 30% and 70% of corporation tax hikes are ultimately borne by workers. “The combination of Brexit and the end of the pandemic makes this a particularly bad time to jack up the corporation tax rate, Bourne says, adding: “New non-tariff barriers on UK-EU trade will impair the GDP potential of the economy, and some companies are figuring out the best places to locate or expand to serve existing or new markets. To add a tax disincentive into the mix by reducing the after-tax return on any UK investments would be a huge own goal.”
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.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.