600,000 SMEs on the brink – business news 27 January 2021.

James Salmon, Operations Director.

600,000 SMEs on the brink, SMEs struggling with Brexit VAT rules, IMF releases latest global predictions, unemployment,  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.

600,000 SMEs on the brink

Begbies Traynor ‘s Real Business Rescue reports a near 80,000 rise in firms in distress in the fourth quarter of 2020, a 15% jump and a large share of the total 118,000 increase since the pandemic struck.

Now almost 600,000 small businesses are on the brink as industry leaders call on the Chancellor to take action at the Budget.

Craig Beaumont, chief of external affairs of the Federation of Small Businesses, said: “More than two thirds of small firms are now carrying some form of debt, with 40% of these saying the debt is now unmanageable.”

Nikola Dacic, economist at Goldman Sachs, warned that “recent data shows emerging signs of tighter credit for SMEs and rising insolvency risks”.

Small firms struggling with Brexit VAT rules

The Federation of Small Businesses has said that its members are facing “significant issues” as a result of leaving the EU VAT area, with one tax advisory firm noting that it was receiving up to 200 calls a week from worried companies.

Selwyn Stein, managing director of VAT IT, a firm that helps reclaim the sales tax, comments: “They are calling us in a panic because their goods have been stopped and they don’t know what to do. They have become fearful about trading so are stopping shipments until they have a resolution.”

A Cabinet Office spokesperson said help was available via a dedicated HMRC phone line and online. “Now the UK has left the EU customs union and single market, there are new rules and processes businesses will need to follow,” they said.

International Monetary Fund

The International Monetary Fund (IMF) has upgraded its forecast for global economic growth in 2021 on hopes of a “vaccine-powered” pick-up in activity later this year. The IMF’s new global forecast is for growth of 5.5% this year and 4.2% in 2022.

For the UK, the growth forecast for this year has been lowered to 4.5%. However, the IMF now thinks the UK’s contraction last year was not as deep as it had previously estimated.

The IMF has downgraded its forecast for UK growth to 4.5% this year, compared to the 5.9% it anticipated in October.

The IMF predicts improved growth of 5% for 2022.

Euro-zone countries have also been downgraded and will collectively register 4.2% growth this year, after a 7.2% fall.

Globally, output shrank 3.5% in 2020, the worst year since World War II, but the IMF suggested it will expand 5.5% this year – more than the 5.2% previously penciled in.

Unemployment rate hits five-year high

As we mentioned yesterday, the UK unemployment rate rose to 5.0% of the economically active population in the last quarter, spurred on by a record rise in redundancies. We take a closer look.

The new figures from the Office of National Statistics for the three months to the end of November showed an extra 202,000 unemployed, taking the jobless total to 1.72m, taking the unemployment rate to 5% for the first time since 2016.

Redundancies rose 168,000 to a record high of 395,000.

The hospitality industry was worst hit by the rise in joblessness, followed by manufacturing. In both sectors, the number of people unemployed was up by more than 50,000 on the previous year.

Across all age groups, redundancies rose to a record high of 14.2 per 1,000 people.

ONS deputy chief executive Sam Beckett told the BBC that the UK had not seen such rises in unemployment since the global financial crisis. Employment was still at “relatively high levels” compared with other countries,

Ms Beckett said, but workers aged 16 to 24 were suffering some of the biggest falls in employment.

However, she added: “We’ve currently got over 4.5m people on the furlough scheme, so that does complicate the picture when you’re trying to interpret what’s going on in the labour market”.

Arcadia collapsed with £750m debt

Filings by Arcadia’s administrator Deloitte reveal that Sir Philip Green’s retail empire fell into administration owing its creditors £750m. According to analysis sent to creditors and seen by The Telegraph, Topshop and Topman had gross liabilities of more than £550m, while discount brand Outfit owed £80m. Creditors to Topshop and Topman are currently owed £82.2m, with overseas suppliers and property owners hit the hardest. At least 22 firms are owed between £1m to £3m each, including Savills and the owner of Westfield White City, the shopping centre. However, the listing “does not capture” unsecured amounts owed to the Arcadia retirement fund and unpaid VAT due to HM Revenue and Customs.

Paperchase sold in pre-pack rescue deal

Stationary chain Paperchase is to be sold in a pre-pack rescue deal to a lender connected with Permira, saving about 1,000 jobs. PwC is understood to be acting as administrator-in-waiting to the chain.

Sellers deterred by end of stamp duty holiday

The supply of homes for sale has dropped sharply, according to property website Zoopla, driven by the ongoing lock-down and the looming end to the stamp duty holiday. The overall volume of homes for sale on Jan 17 was 6.4% lower than the same day in 2020. Meanwhile, Parliament has announced that a stamp duty extension would be debated by MPs on Feb 1st, after more than 100,000 people signed an online petition.

Annuity rates fall to new low

Annuity rates hit record lows in 2020 continuing a trend of deterioration that has seen the guaranteed source of income lose value in five out of the past six years. Rates fell 6.4% in the 12 months since January 2020, according to Moneyfacts. This meant the average basic “single-life” annuity for someone aged 65 now only pays £4,590 a year from a £100,000 pot. Nathan Long of Hargreaves Lansdown said: “With rates remaining so low, it requires quite a lot of courage to buy an annuity using your entire pension.”


Microsoft reported second-quarter revenue of  $43.1bn, above the $40bn estimated and a 17% year-on-year increase, far exceeding analysts’ expectations. The tech giant has reaped profits in a locked-down world, where workers-from-home buy computers and their firms keep shifting software to the cloud,w here Microsoft’s revenues rose by 34%, to $16.7bn, and then they spend their evenings on the xbox.

Electric vehicles

The EU approved a €2.9bn ($3.5bn) plan to support the production of batteries for electric vehicles within the bloc. The project will give state aid to firms including Tesla, BMW, Fiat Chrysler Automobiles and others in an attempt to compete with China, which produces 80% of the world’s lithium-ion battery cells.

Covid-19 general news

There were 20,088 new cases in the UK yesterday with 1631 more deaths.

Globally 546,267 new cases brought the total  to 100.2 million with 2,157,791 deaths.

Global Covid-19 cases topped 100 million Tuesday, according to Johns Hopkins data, less than three months after passing 50 million. But the actual numbers are probably much higher.

More than 100,000 people have died from covid in the U.K., making it the first country in Europe to surpass the threshold. Deaths in London, which is at the center of the current outbreak, are running at 84% above the five-year average  There are 37,561 patients hospitalized with Covid-19 across the country.

The UK Government are reportedly about to announce a policy of enforced quarantine in hotels for those arriving from abroad. Hotel chains are expecting the government to announce measures that will affect those arriving in the UK, ITV reported. The broadcaster reported UK arrivals would quarantine for 10 days under security with all meals to be eaten in their rooms, for a price of at least £1,500. It has been separately claimed that the enforced quarantining will only apply to travelers from high risk countries.

The Dutch government kept in place a night-time curfew aimed at preventing the spread of covid-19, despite three nights of riots across the country.


Yesterday the FTSE 100 closed at 6654.01 up 0.23%   and the 250 closed at 20448.36 up 0.48%.  The Eurostoxx 50 was up 1.12% and the 600 up 0.63%. Overnight, the S&P 500 dropped -0.15%. and the NASDAQ dropped -0.07%. Sterling has strengthened and is at 1.131 Euros and 1.374 US Dollars. Brent Crude is at $56.4 and Gold is at $1849.

The FTSE 100 closed modestly up on the day after an early surge. Gains in financial services and chemical sectors helped European stocks rise today after two straight days of declines.

Asian Markets were mostly higher this morning despite the negative movements on Wall Street, as investor sentiment received a boost after the International Monetary Fund raised its outlook for global economic growth.

Oil Prices ticked up yesterday alongside rising European equities and amid reports of a blast in Saudi Arabia, with crude trading near 11-month highs.

Gold Prices fell yesterday as a slightly firmer dollar and uncertainty over a US stimulus package kept bullion under pressure, with investors awaiting cues on future monetary policy decisions from the US Federal Reserve.

UK government plans post-Brexit reform of investment industry

Tax reforms and innovative fund structures could be used to strengthen the competitiveness of the UK’s £9.9tn asset management industry, according to a consultation document published by the Treasury.

UK to start talks with Switzerland on financial services deal

Rishi Sunak will today start formal talks with his Swiss counterpart in an attempt to broker a new post-Brexit financial services agreement for the UK. The Treasury said the talks would see the two sides try to deliver “a comprehensive mutual recognition agreement that would reduce costs and barriers for UK firms accessing the Swiss market” and vice versa. The talks are expected to cover a wide range of areas, including banking, insurance, asset management and capital markets. Mr Sunak said: “Our ambition is to deliver one of the most comprehensive agreements of its kind in financial services as part of our plan to seize new opportunities in the global economy now we have left the EU.”

Billionaires aren’t just rich people, they’re policy failures

The Guardian’s Arwa Mahdawi discusses a report from Oxfam which reveals the combined wealth of the world’s 10 richest men has increased by $540bn since the start of the pandemic. Amazon boss Jeff Bezos saw his wealth increase by $13bn in one day last July – a record for the largest single-day increase in individual wealth ever recorded. The report on inequality comes as a growing number of countries discus wealth taxes as their assets drain away on funding pandemic rescue plans. Oxfam’s report will be harder to ignore this year, writes Mahdawi, who goes on to say that millionaires should be asked to pay their fair share via a more progressive tax system while billionaires shouldn’t exist at all: “Billionaires aren’t just super-rich people, they’re policy failures. A system in which 10 men can see their collective wealth increase by half a trillion during a global crisis can’t be fixed wit h a one-off wealth tax – we need greed taxes that prevent people amassing that much in the first place.”

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.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

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.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

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.