War on Cash – business news 20 January 2021.
James Salmon, Operations Director.
The war on cash, recovery prediction, lifeline for self employed, tax warning, inflation, review of workers rights, 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.
War on cash
A poll from consumer group Which? shows the war on cash has accelerated and suggests that the coronavirus pandemic has accelerated a move toward a cashless society, with 34% of respondents saying they have been unable to pay with cash when making a purchase at least once since March. The study found that grocery stores, pubs and restaurants were the businesses most likely to refuse a cash payment. One in 20 people polled said they still rely on cash, while one in seven said they would struggle without it, and two-fifths view cash as an essential backup. Jenny Ross of Which? says ministers must “urgently make the Financial Conduct Authority responsible for tracking cash acceptance levels”, noting that legislation to protect cash promised almost a year ago has yet to be introduced. Natalie Ceeney, author of the Access to Cash Review, says the survey shows that a refusal to accept cash is “creeping into the wider UK economy”. John Howells, CEO of Link, said the ATM network estimates that cash usage will have halved by the end of 2021 compared to the start of the pandemic.
KMPG: Recovery may take two years
KPMG estimates that the economy could take two years to recover from the coronavirus crisis, saying it should be back at its pre-pandemic size by the first quarter of 2023. It believes the rollout of coronavirus vaccines should help boost growth in the second half of this year, suggesting GDP could be up 4.2% in 2021, with the forecasts assuming all vulnerable groups are vaccinated by April.
Lifeline lined up for Self Employed
Freelance workers excluded from state support amid the coronavirus crisis may be granted a lifeline, with a group of MPs calling on the Chancellor to include them in the final round of self-employed grants. While many newly self-employed workers were excluded from help as they had never filed tax returns, by the time February’s round of grants are issued they will have filed full-year accounts, with the tax return deadline coming on January 31. Esther McVey, co-chair of the All-Party Parliamentary Group (APPG) on Gaps in Support said: “Too many of those who made the leap into self-employment have been denied desperately-needed help because of a quirk of timing.” The APPG has called on HMRC to publish an explanation of why it cannot help freelancers and other groups that have been excluded from support initiatives. A number of MPs have written to Rishi Sunak over the matter, while Andy Chamberlain of freelancer trade body IPSE insists: “There should be no reason not to extend support grants now.”
Business and economists warn Sunak over tax plan
Rishi Sunak has been warned against a tax raid on businesses, with business leaders and economists voicing concern over reports that the Chancellor is considering increasing corporation tax in his March 3 budget as he looks to tackle the deficit. Matt Kilcoyne, deputy director of the Adam Smith Institute, believes that if he pushes ahead with the mooted increase, the Chancellor “risks slamming the brakes on an economy that looks like it is just about to get back up to speed and that is a fool’s errand.” Adam Marshall, the director-general of the British Chambers of Commerce, said: “Coming out of the worst economic crisis in a generation, we should be signalling that we want a positive and favourable environment for business in the UK”, adding: “The time now is to demonstrate that we are open for business. Far better to signal no immediate tax rises at all.” Tom Clougherty, head of tax at the Centre for Policy Studies, said Britain’s “unusually stingy treatment of investment costs means we lag behind many of our international competitors already”, warning that raising the corporation tax rate “would make matters much worse.” Julian Jessop, a fellow at the Institute of Economic Affairs, said he “despaired” at talk of tax rises amid ongoing Brexit disruption, insisting: “Now is not the time to raise any sort of tax.” Elsewhere, the FT’s Lex column reflects on a potential corporation tax increase, saying that as it is “so fuzzy and indirect”, it is “politically easier to hike than direct taxes on individuals”.
Tice: ‘You can’t tax your way out of this crisis’
Richard Tice, chair of political party Reform UK, has urged the Prime Minister to cut taxes and regulation in a bid to boost the economy in the wake of the coronavirus crisis. He said cutting taxes will drive faster growth, insisting: “You can’t tax your way out of this crisis, you have to grow your way out of this crisis.”
Inflation
Inflation doubled in December as prices rose during the festive period, the Office for National Statistics has announced. Prices in the run-up to Christmas were up 0.6% compared to a year earlier and rose from 0.3% in November. Higher prices for transport, recreation and culture were flagged by statisticians, despite food and drink prices falling.
Government to review workers’ rights
Business Secretary Kwasi Kwarteng has confirmed the government is to review EU labour laws but insists there will be no dilution of workers’ rights. He told the Business, Energy and Industrial Strategy Committee that his department is carrying out a consultation with business leaders on EU employment regulations, with the working time directive, which sets a maximum 48-hour week, among rules being evaluated. Mr Kwarteng said the UK will maintain “a really good high standard for workers in high employment and a high-wage economy”, adding that suggestions ministers could look to “whittle down standards” are “not at all plausible or true.” Mr Kwarteng told MPs there would be no “bonfire of rights”. Shadow business secretary Ed Miliband voiced concern over the review saying: “A government committed to maintaining existing protections would not be reviewing whether they should be unpicked.”
HMRC eases debt-collection tactics
HMRC has stopped using debt collectors and threatening repossessions during the pandemic, reports the Times, with officials also suspending the use of “field force collectors” until the end of the lockdown. HMRC has confirmed its policy had changed, saying: “We are currently not contacting customers with tax debts via debt collection agencies.” It added that it is “focusing on customers who contact us for further support” in order to “understand their circumstances and work with them to find an affordable way forward”. The Times previously reported enforcement tactics it deemed questionable, with the tax office subsequently issuing apologies for letters accusing people of deliberately not repaying debts, saying the content was a “mistake” that did not reflect its current approach to debt collection. A Times editorial welcomes HMRC’s shift in stance and says that as the self-assessment returns deadline looms, HMRC should “show it has learned the lessons of this unedifying episode” by showing understanding in regard to challenges faced by small-business owners and the self-employed.
WH Smith
WH Smith reported a drop in revenue after its one-booming travel division was battered by border closures owing to the pandemic. The company had generated more cash than expected in November & December due to better-than-expected trading in the Xmas period.
Netflix
Netflix said that it added 8.5m new subscribers in the fourth quarter of 2020, pushing its total past 200m. Revenues rose by 24% year-on-year, hitting $25bn. Video-streaming has provided succour for a locked-down world. With profits growing, Netflix said it would stop issuing debt to fund new content and consider buybacks. Its share price jumped 13% in extended trading.
Paperchase files intent to appoint administrators
Paperchase is filing a second notice to appoint administrators. The stationery chain, which boasts 173 stores and concessions, originally filed notice on January 5, handing it 10 days protection from its creditors, with the firm saying the latest coronavirus lockdown had put an “unbearable strain” on the retail sector.
Arcadia to shut 31 stores
Administrators at Deloitte are set to close 31 stores under the Arcadia umbrella, with many of the closures hitting branches of Outfit. Arcadia is currently in the process of being sold off, with the deadline for bids having passed on Monday. Contenders reportedly include Next, which is bidding in partnership with US hedge fund Davidson Kempner; US retail giant Authentic Brands, which is linked to a joint bid with JD Sports; China’s Shein; and G-III Apparel, owner of the DKNY brand.
Premier Foods
Premier Foods said sales were higher in its third financial quarter, with particular growth in Branded sales while Non-Branded sales declined.
HSBC
HSBC will close 82 branches across the country, the company has announced. Sites will start shutting their doors permanently from April 23, starting with Edinburgh’s Princes Street branch, with approximately three closing each week until the end of September.
Markets
Yesterday the FTSE 100 gave up early gains to finish the day in the red, down 0.1%. European shares also closed slightly negative after Asian markets rallied on optimism about China’s economy
Overnight, the S&P 500 rose 0.81% and the NASDAQ rose 1.53%. Stock markets are in the early stages of a bull run, according to Goldman Sachs, which reckons the recent valuations-led rally is typical of the start of a new economic cycle.
Oil Prices rose on expectations the incoming Biden administration will proceed with massive stimulus spending that would boost fuel demand and draw down oil stocks.
Gold Prices rose in early trade, as the dollar weakened after US Treasury Secretary nominee Janet Yellen underscored the need for a huge stimulus to help the economy recover from the coronavirus jolt, bolstering bullion’s appeal as an inflation hedge
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.