Unemployment rises – business news 15 September 2020.
James Salmon, Operations Director.
Unemployment rises, shopper numbers slip, SMEs adapting, tax, brexit, covid-19, market and lots of 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.
Young bear the brunt of unemployment rise
The UK unemployment rate has risen to its highest level for two years according to official figures from the Office of National Statistics.
The unemployment rate grew from 3.9% to 4.1% in the three months to July.
Young people were particularly hard hit, with those aged 16 to 24 suffering the biggest drop in employment compared with other age groups.
Firms continue to remove staff from payrolls as they prepared for the end of the government’s furlough scheme.
ONS director of economic statistics Darren Morgan said that there had been some signs that the economy “reopened” in July as businesses including restaurants, pubs and hairdressers were allowed to trade again. “Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work,” he said.
Almost 700,000 UK Workers have lost their jobs since the coronavirus pandemic began in March, according to the latest statistics.
HM Revenue and Customs and Office for National Statistics data showed early indicators for August suggest that the number of employees in the UK on payrolls was down around 695,000 compared with March.
Once the Furlough scheme ends in October, unemployment is expected to rise sharply as firms shed staff no longer supported by the government scheme.
Labour leader Sir Keir Starmer will today urge the government to replace the furlough scheme to avoid the “scarring effect” of mass unemployment. The government’s job retention scheme has been used by more than 10 million workers since its initial launch in March, however is set to end on 31 October.
Shopper numbers slip
Market research firm Springboard has revealed that shopper numbers across UK retail destinations were down 6.3% last week compared with the week before, with the first week-on-week decline since April.
Footfall across UK high streets declined 5.4% and by 5.2% at retail parks. While regional cities saw a 7.9% fall in footfall, the decline in central London was just 3%. Springboard said a dip in the week when the school year starts is common but the scale is greater this year.
Director Diane Wehrle remarked: “Whilst this is a pattern of consumer activity that Springboard has come to expect – we have seen this drop occur in all but one year since we started publishing our footfall indices in 2009 – the magnitude of the drop has been larger than in any previous year.
This signifies the continued impact of many Brits continuing to work from home as offices across the UK remain closed.” The annual decline in shopper numbers stood at 27.5% last week, compared with a 25% dip recorded the previous week.
Shopping goes online
The move to online shopping is highlighted in the latest Ocado figures which show that the Online grocer had a 50% increase in sales in the third quarter, greater than the second quarter increase.
Melanie Smith, Ocado Retail’s chief executive, said: “Our aim is to continue to set the bar as we begin again to welcome new customers who are seeing the benefits of online shopping in ever greater numbers and we remain focused and on track to increase capacity by 40% through to 2021.”
Second spike could reverse recovery
Tom Rees in the Telegraph considers the impact a second wave of COVID-19 infections could have on the economy, saying a record-breaking rebound in GDP expected in Q3 “could be a brief respite rather than the start to a roaring recovery”. Ian Stewart, chief economist at Deloitte, says: “A second full lockdown, in an already weakened economy, would likely be even more damaging than the first one.” He adds: “The path of the disease, and our success in containing it, holds the key to economic activity.”
Changes forced by lockdown create rare opportunity for small businesses
Government-backed organisation Be The Business believes the coronavirus crisis has presented small firms a “once in a generation” opportunity to adopt digital technology, saying government support could help remove remaining barriers.
Executives reveal office return plans
A Government campaign urging people to return to workplaces will include a media campaign where executives detail how their businesses have managed the transition back into the office. One item carried in newspapers sees PwC chairman Kevin Ellis say staff “definitely want the option to be able to use the office”. PwC hopes to have 50% of its 22,000 employees back at work for at least a “few days a week” by the end of the month, with around 8,000 already back.
BCC calls for tax cuts to save economy
The British Chambers of Commerce (BCC) has urged the Government to take “bolder and more ambitious” action to help keep business afloat and support jobs amid the coronavirus crisis. Outlining measures the BCC feels are required to boost the economy, president Baroness Ruby McGregor-Smith said more than £20bn of tax cuts are needed to save jobs and boost investment. The BCC has suggested raising the threshold at which employers’ national insurance contributions kick in from £8,788 to £12,500 and increasing the Employment Allowance from £4,000 to £20,000. To boost investment, it suggests extending the Annual Investment Allowance at £1m for another two years and continuing 100% business rates relief for industries hit by the pandemic and restrictions it prompted.
Starmer: Now not the time to increase taxes
Sir Keir Starmer believes increasing taxes would be “the wrong thing to do” while the economy looks to recover from the coronavirus crisis. A caller to Sir Keir’s monthly LBC phone-in asked him to oppose an increase in corporation tax they said could hurt small businesses. The Labour leader said his party is “not calling for rises in tax, particularly at the moment when we absolutely need to reopen our economy”.
Brexit
Despite the breaking of ranks by several high-profile Conservative MPs, and criticism from all five of Britain’s living former prime ministers, the House of Commons passed the first reading of the internal-market bill by a comfortable 77 votes. The bill will enable the government to break international law and allow the government to void parts of the Brexit withdrawal agreement negotiated with the EU which Boris Johnson signed only in January. The House of Lords is expected to be less accommodating. The prime minister said the proposed legislationis “essential” to maintain the U.K.’s economic and political integrity
Business hits back after VAT body blow
Retailers, tourism-focused firms and airport operators are considering legal action over the Government’s plan to scrap VAT relief for overseas visitors at the end of the Brexit transition period
Covid-19 general news
With 196,017 new cases, global cases reach 29.1 million and deaths pass 928,000.
According to the FT, the government is preparing to extend the protection from eviction to commercial tenants from the current deadline of the end of September, to the end of the year.
A day after Pfizer Inc.’s chief executive officer said a vaccine would likely be available to the U.S. public before year-end, China’s state-run Global Times tweeted that the country may roll out a shot to “ordinary Chinese” as early as November. Meanwhile, U.K. researchers are studying whether two vaccines from the University of Oxford and Imperial College London can be inhaled, hoping to trigger a more effective immune response.
AstraZeneca said it has resumed clinical trials in the UK of its Covid-19 vaccine after a green light from the country’s Medicines Health Regulatory Authority. Earlier in September, the company paused the vaccine trials across the world after a UK volunteer developed an unexplained illness.
The US Budget Deficit has reached a record high after topping $3tn (£2.3tn) as the government’s mass spending on covid relief continues. The treasury department said it spent more than $6tn in the first 11 months of its financial year, which included $2tn on Covid-19 programmes.
Markets.
Investors seemed to have put last week’s selloff in stocks behind already. Asian markets, except Japan, trade generally higher following the rebound in the US overnight.
In Asia, the Nikkei closed down -0.44% the Hong Kong HSI is up 0.44%, the China Shanghai SSE is up 0.39% and the Singapore Strait Times is up 0.46%. In the US, the S&P 500 rose 1.27% and the NASDAQ rose 1.87%.
JD Wetherspoon said sales over the weekend were 22.5% below the equivalent Saturday last year, and the pub company hit back against the press for what it claimed were “negative views” about the risk of contracting Covid-19 in pubs.
Oil prices rose on Monday as a tropical storm in the Gulf of Mexico prompted drillers to evacuate rigs and shut in production, although gains were muted by concerns about excess global supplies and falling fuel demand. Gold Prices also rose, supported by a weaker dollar and expectations that the U.S. Federal Reserve will adopt a dovish stance at its two-day monetary policy meeting later this week.
New Look CVA put to landlords
New Look’s restructuring plans could be dealt a blow by its landlords today, with a number of property owners expected to oppose the retailer’s CVA. Landlords including British Land, Newriver Reit, Hammerson and Land Securities are reportedly planning to vote against the restructuring. Between them, these landlords own about 55 of New Look’s 490 UK sites. New Look’s hedge fund owners plan to inject £40m into the business through a debt-for-equity swap, with this dependent on the chain’s stores switching to turnover-linked rent. This would see landlords accept no rent on 68 stores for three years and as little as 2% of turnover on 402 others.
HMRC wage probes increase
Law firm Pinsent Masons has analysed HMRC data on probes into issues linked to the minimum wage, with it found that investigations have occurred most frequently in Aberdeen, with 10.2 being conducted per 100,000 people in 2019. Blackburn came second (9.8), followed by Birmingham (9.6), Belfast (9.1) and Leicester (9). With HMRC having ramped up scrutiny of pay and employment practices, it was found that the number of national minimum wage investigations jumped to 3,561 last year, up from 2,807 in 2018/19. Figures also show that HMRC imposed 1,008 penalties worth a total of £17.1m in 2018/19, an increase on the 810 fines worth a combined £14.1m issued in 2017/18.
New gateway to the single market
KPMG analysis suggests Luxembourg may be the big winner as firms relocate from the UK, with 72 businesses outlining plans to switch to the country following the Brexit vote. Meanwhile, the FT notes that more than 100 US companies operate in the Grand Duchy, including EY, KPMG and PwC.
The FT looks at Luxembourg’s efforts to lose its reputation as a tax haven, with an OECD peer review into transparency saying the country’s tax system is now “largely compliant”.
Head of new accounting body announced
Former PwC partner Pauline Wallace has been appointed as the first chair of the new Accounting Standards Endorsement Board (UKEB). Where international accounting rules applied in Britain were endorsed by the European Union, once the Brexit transition period comes to an end in December Britain will sanction the rules itself, with the new body set to endorse and adopt new or amended international standards issued by the International Accounting Standards Board. The Financial Reporting Council said the new body will help to ensure that Britain retains its status as a global hub for business, attracting inward capital and investment.
Accountant arrested over furlough fraud
HMRC has revealed that two people have been arrested on suspicion of furlough fraud of up to £700,000, with an accountant arrested on suspicion of fraud by false presentation, fraud by abuse of position and money laundering. The second incident saw a company director arrested on suspicion of fraud by false representation and money laundering.
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.
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.