Budget Day – Business news 30 October 2024

Its Budget Day and here is our final blog before the budget speech, with commentary, markets, insolvencies & more business news that we thought would interest our members.

To mark the day, the writer ran past Parliament – and forgive me for mentioning a personal milestone but I am currently running every road in London and today, after 4 long years i finally passed 50%. You don’t know how big London really is until you try to cover every single road.

So, after weeks of anticipation, lots of speculation and gnashing of teeth, and the amusing debate over what exactly is a “working person,” today we are here and we finally see what it is going to cost us. Rachel Reeves, the first female chancellor in 800 years,  will finally carry the red box from Downing Street to Parliament for her first budget.

James Salmon, Operations Director.

Workers will bear the burden of a tax raid on employers

The Labour Government’s proposed increase in National Insurance contributions could lead to a £3,000 reduction in workers’ incomes. The change could see employer contributions rise from 13.8% to 14.8%. According to Melanie Pizzey, CEO of the Global Payroll Association: “Whilst pay cuts aren’t out of the question, a freeze on pay increases is the least [employees] can expect in the short to medium term.” Experts from the Institute of Economic Affairs (IEA) warn that the burden of increased employer taxes often shifts to workers, resulting in lower wages. Tom Clougherty, IEA executive director, stated: “The idea of tax hikes that don’t hit ‘working people’ is little more than a political fantasy.” Former OBR chief Sir Charlie Bean agreed. The Telegraph cites him as saying: “Real wages will turn out to be lower than they would otherwise be…So at the end of the day, it will be workers who bear the burden.” The tax hike is also expected to hit 700,000 individuals working as contractors and freelancers. Andy Chamberlain, of self-employment body IPSE, said: “It’s difficult to see how this wouldn’t breach Labour’s pledge not to raise taxes for ‘working people’.”

London businesses freeze hiring ahead of Budget

London businesses are hesitating to hire new staff ahead of the upcoming Budget, driven by concerns over potential tax increases. A survey by KPMG, the Recruitment and Employment Confederation (REC), and BusinessLDN revealed that the London permanent placement index dropped to 43.7 in September, indicating a significant slowdown in hiring compared to the national average of 44.9. Muniya Barua, deputy chief executive at BusinessLDN, stated: “With the number of people out of work in the capital at its highest level in almost three years, the Chancellor needs to do more to get private investment motoring.” The anticipated tax hike of £35bn, particularly an increase in employers’ national insurance, is expected to further deter hiring and wage growth, with business groups warning of long-term impacts on employees.

UK faces Scandinavian-style tax burden

Labour’s upcoming budget is set to impose a significant £35bn increase in taxes, potentially leading to the highest tax burden in the UK since records began. The proposed tax increases could push the UK’s tax-to-GDP ratio close to 38%, in line with Spain, and closing on countries such as Sweden and Norway – where the ratios are 42.6% and 42.2%, respectively.

Corporate tax roadmap could sign post destination for capital

Chris Sanger, UK tax policy leader at EY, writes in City AM on the significance of the Government’s upcoming corporate tax roadmap, set to be published in the Budget. He asserts that while immediate Budget announcements may attract attention, “it is the roadmap that perhaps holds the potential to create the most enduring impact.” Sanger notes the importance of providing predictability for investors and a clear approach to a broad range of business taxation – not only corporation tax.

Wealth tax could cost UK £100bn

The Taxpayers’ Alliance (TPA) has released a report warning that introducing a wealth tax in the UK could lead to a £100bn reduction in GDP over the next decade. The study suggests that a 2% tax on individuals with a net wealth of £10m would decrease the annual GDP growth rate by 0.4%, resulting in a £1,107 reduction in wages. The report argues that rather than generating revenue, a wealth tax could drive wealthy individuals to leave the country, leading to a significant loss of taxable wealth. John O’Connell, chief executive of the TPA, said: “Imposing a wealth tax would be the peak of economic madness given the UK’s vulnerability to capital flight and the already punishingly high rates of tax imposed on the UK’s top earners.”

Executives rush to sell shares amid CGT fears

UK executives are selling shares at an unprecedented rate amid concerns that Chancellor Rachel Reeves will increase capital gains tax in the upcoming Budget. Last week alone, directors sold £29.8m worth of shares, while purchases amounted to only £4.1m, resulting in a net sale of £25.7m. Over the past month, total sales reached £163.4m against £48.5m in purchases, leading to a net sale of £114.9m, according to Graniteshares. The FT points out that along with executives selling shares, investors are also adjusting their bond portfolios and some business owners even accelerating planned liquidations ahead of today’s Budget. Meanwhile, concerns over the abolition of inheritance tax relief on AIM stock is leading to fears that billions could be pulled out of AIM as a result.  Laith Khalaf, head of investment analysis at AJ Bell, said retail investors were on “red alert” to any changes to the levy.

Hunt warns against politicising OBR review

Former Chancellor Jeremy Hunt has accused Shadow Chancellor Rachel Reeves of politicising the Office for Budget Responsibility (OBR) by scheduling the release of a review into a supposedly unaccounted for £22bn black hole in the public finances on Budget Day. Hunt said publishing the review at the same time as the Budget undermines the OBR’s impartiality.  In a letter to the organisation, he stated: “Straying into political territory and failing to follow due process like this demeans it and also is deeply problematic for perceptions of the impartiality of the civil service.” Mr Hunt says in a piece for the Times that the “OBR must be politically impartial because the public and markets need to know that it is holding the Government to account without fear or favour.” The chairman of the OBR, Richard Hughes, said the watchdog’s review is “concerned with the adequacy of the information and assurances” it was given by Mr Hunt’s Treasury in the run-up to the March 2024 Budget.

National Living Wage to rise by 6.7%

The Chancellor has confirmed that the minimum wage for over 21s will increase from April 2025 by 6.7%, from £11.44 to £12.21. This will mean £1,400 over a year. For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10 – up more than 16% and worth £2,500 per annum. Apprentices will get an 18% pay bump, from £6.40 to £7.55 an hour. Rachel Reeves said the boost would benefit more than 3m workers and was a “significant step” towards delivering a “genuine living wage” for all employees. But the move was not welcomed by business leaders. John Foster, of the Confederation of British Industry, said that “with productivity stagnant, businesses will have to accommodate this increase against a challenging economic backdrop and growing pressure on their bottom line.” Elsewhere, Kate Nicholls, chief executive of trade body UKHospitality, said the pay increases would add £1.9bn to the sector’s wage bill and prove “simply unsustainable if taxes are going to shoot up at the same time.”

Labour’s welfare bill faces £2bn hike

Labour’s welfare bill may increase by £2bn due to significant underestimations of long-term sick leave claimants. The Centre for Social Justice (CSJ) revealed that official figures are off by approximately 255,000, creating a substantial ‘black hole’ in the Department of Work and Pensions (DWP) budget. CSJ chief executive Andy Cook stated: “As if the challenge of economic inactivity wasn’t tough enough already, our analysis suggests there are thousands more claimants slipping through the cracks.”

Markets

Yesterday, the FTSE 100 closed down 0.8%  at 8219.61 and the Euro Stoxx 50 closed down 0.4% at 4950.02. Overnight in the US the S&P 500 rose 0.16% to 5832.92 and the NASDAQ rose 0.78% to 18712.75.

US markets were cautiously higher overnight on Tuesday and into Wednesday, as traders prepared for additional reports from major technology companies and looked ahead to a key reading on the economy’s growth.

This morning on currencies, the pound is currently worth $1.299 and €1.199. On Commodities, Oil (Brent)  is at $71.6 & Gold is at $2783. On the stock markets, the FTSE 100 is currently down 0.38% at 8187 and the Eurostoxx 50 is down 0.78% at 4911.61.

Mortgage approvals surge as rates fall

The Bank of England has reported a significant increase in mortgage approvals, with September figures rising by 700 to reach 65,600, marking the fourth consecutive monthly increase. This surge is attributed to falling interest rates, which have rekindled buyer interest in the property market. The effective mortgage rate has decreased from 4.84% to 4.76%, further encouraging borrowing. Economist Thomas Pugh from RSM UK noted: “All the factors which are contributing to the broader economic recovery are also positive for the housing market.” He anticipates annual price rises of 4% to 5% by year-end, as house prices remain about 2% below their summer 2022 peak.

HMRC admits it’s charging savers too much tax

HMRC has admitted that it incorrectly calculates savers’ tax liabilities in about 3,500 cases a year. The issue came to light after one pensioner complained she had been overcharged on her savings income every year since 2019. Linda MacBryde earned about £10,000 in pension income, £6,000 from dividends and £450 in savings interest. However, HMRC had failed to apply the personal savings allowance when working out her tax bill.

GSK

GSK backed its yearly guidance, after “another quarter of sales and core operating profit growth”. Its specialty medicines offering impressed, but the pharmaceutical firm’s vaccines arm delivered a weaker quarter. Pretax profit in the third-quarter of 2024 slumped 96% to £64 million from £1.79 billion, its bottom line hit by a £1.8 billion charge in relation to a Zantac court settlement. Core pretax profit, however, advanced 1.1% to £2.64 billion from £2.62 billion. Revenue in the third-quarter of the year fell 1.7% to £8.01 billion from £8.15 billion.

Next

Next said sales in its third-quarter tipped expectations, and it has lifted its outlook for the full-year. Full price sales in the third-quarter to October 26 rose 7.6% on-year, beating guidance of 5.0%. “We believe the strong performance was driven by the early arrival of colder weather this year, versus an unusually warm September and early October last year,” the clothing and homewares seller explained. For the fourth-quarter, it now expects full price sales growth of 3.5%, its outlook lifted from 2.5%. Full-year pretax profit guidance has been upgraded to £1.01 billion from £995 million.

Google

Alphabet – Google’s parent – saw its profit rise by 34% to $26.3bn in the third quarter compared with the third quarter in 2023, beating expectations. The tech giant’s cloud-computing business posted particularly strong results, with revenue growing by 35% to $11.4bn.It was seen as a result of AI deployment.

Insolvencies at fashion manufacturers jump

According to Forvis Mazars, supply and demand pressures and a switch to pre-loved clothing has pushed over 100 UK fashion manufacturers into insolvency in the year to July 2024, up from 86 companies in the previous year. Rebecca Dacre, partner at the firm, said: “In a cost-of-living crisis many consumers simply do not have the disposable income to spend on luxury clothing. That has now impacted from the affordable luxury end of the fashion market right through to prestige brands. Some fashion manufacturers haven’t been able to survive the slowdown in consumer spending.”

Latest Insolvencies

Appointment of Liquidators – TRITON COMPUTER SERVICES LTD
Appointment of Liquidators – ZG UPHOLSTERY LTD
Appointment of Liquidators – PAMTASHKIM LIMITED
Appointment of Liquidators – CORFIELD MORRIS LIMITED
Appointment of Liquidators – TROJAN CIVIL ENGINEERING LIMITED
Appointment of Liquidators – RANGEBALL UK LIMITED
Appointment of Liquidators – RIFFA FABRICATIONS LIMITED
Appointment of Liquidators – THUNDERBIRDS PROPERTY CO LTD
Petitions to wind up (Companies) – EM DAIRIES LTD
Appointment of Liquidators – MARK SMITH GLAZING HOLDINGS LIMITED
Appointment of Liquidators – ELMA MEDICAL LTD
Winding up Order (Companies) – SHOREFIX (I.O.W.) LTD
Appointment of Liquidators – CATALYTIC ADVISORY LTD
Appointment of Liquidators – FRESH TRAINING SOLUTIONS LIMITED
Appointment of Liquidators – NR BEARDSLEY LIMITED
Appointment of Liquidators – COSGROVE ESTIMATING SERVICES LIMITED
Appointment of Liquidators – T & S POOLE LIMITED
Appointment of Liquidators – CLAUDE HOOPER HOLDINGS LIMITED
Appointment of Liquidators – CLAUDE HOOPER LIMITED
Appointment of Liquidators – RUBERY OWEN TRADING LIMITED
Appointment of Liquidators – KRUGER INVESTMENT LIMITED
Appointment of Liquidators – MALCOLM GIFFORD WEALTH MANAGEMENT LIMITED
Appointment of Liquidators – NPX-NQX LIMITED
Appointment of Liquidators – EMSMORN LIMITED
Appointment of Liquidators – CNITA LIMITED
Appointment of Liquidators – GINGER DEVELOPMENTS LIMITED
Petitions to wind up (Companies) – ABOVE DEBT LIMITED
Petitions to wind up (Companies) – STAPLEOFFICE LIMITED
Petitions to wind up (Companies) – GLENEAGLE SERVICES LIMITED
Appointment of Liquidators – XRA SERVICES LIMITED
Appointment of Liquidators – RTSL NEWCO LIMITED
Petitions to wind up (Companies) – CAPRICE LIMITED
Appointment of Liquidators – ROWAN TIMBER SUPPLIES (SCOTLAND) LIMITED
Appointment of Liquidators – NICOLA POTTS EXECUTIVE COACHING LIMITED
Appointment of Liquidators – DEXSTRA LTD
Appointment of Liquidators – STONEYSTREET PROPERTIES LIMITED
Appointment of Liquidators – KEVERN ACCOUNTING SERVICES LIMITED
Appointment of Liquidators – THE GOLDEN CHOPSTICKS AWARDS LTD
Appointment of Liquidators – CHEALE PROPERTIES LIMITED
Appointment of Liquidators – MARNEK LTD
Appointment of Liquidators – WHITCHERCNC LIMITED
Appointment of Liquidators – C M RESTAURANTS (HOLDINGS) LIMITED
Appointment of Liquidators – CYBCUBE LIMITED
Appointment of Liquidators – HOFFBECK LIMITED
Appointment of Liquidators – ELDERFIELD DEVELOPMENTS LIMITED
Appointment of Liquidators – J.N.C. PLASTERING SERVICES LIMITED
Appointment of Liquidators – EXECUTIVE JET CHARTER MANAGEMENT LTD
Appointment of Liquidators – ALAN AND VICKI MOWAT LIMITED
Appointment of Liquidators – NIPEMO LIMITED
Petitions to wind up (Companies) – CNBS PRODUCTS LIMITED
Petitions to wind up (Companies) – COLLPAY LTD
Petitions to wind up (Companies) – SACHMAD INTERNATIONAL LIMITED
Petitions to wind up (Companies) – PROJECT COOLING (UK) LIMITED
Petitions to wind up (Companies) – BAAH SERVICES LIMITED
Appointment of Liquidators – MUTCH BUILDING & CARPENTRY LIMITED
Appointment of Liquidators – SOFTHUB LTD
Appointment of Liquidators – ARION CAPITAL LIMITED
Appointment of Liquidators – ICE TRACKS LTD
Appointment of Liquidators – CORLETT HOMES LTD
Appointment of Liquidators – LEIGH DEVELOPMENTS LIMITED
Appointment of Liquidators – SOLON GROUP LIMITED
Appointment of Liquidators – STEVEN G LTD
Appointment of Liquidators – STUMBAVE LIMITED
Appointment of Liquidators – THE LAUNDRETTE SHOP LTD
Appointment of Liquidators – TEJAS GOPALAKRISHNA SOLUTIONS LIMITED
Appointment of Liquidators – KUMAR & KUMARI MEDICAL SERVICES LIMITED
Appointment of Liquidators – GNM (BRISTOL) LIMITED
Appointment of Liquidators – 7 MONTAGU MEWS COMPANY LIMITED
Appointment of Liquidators – S J HAYWOOD CONSULTING LIMITED
Appointment of Liquidators – SJC ELECTRICAL SERVICES BRISTOL LTD
Appointment of Liquidators – DEREK HORTON TRANSPORT LIMITED
Appointment of Liquidators – BYNE FINANCIAL LIMITED
Appointment of Liquidators – TIM PEAT LTD
Appointment of Liquidators – THE PRECISE PUB COMPANY LIMITED
Appointment of Liquidators – ALPEGO UK LTD
Appointment of Liquidators – CITY SOFTWARE INTERNATIONAL LIMITED
Appointment of Liquidators – COALVILLE VAN CENTRE LTD
Appointment of Liquidators – L3HARRIS TECHNOLOGIES ASA LIMITED
Appointment of Liquidators – CIRCUIT ALERT LIMITED
Appointment of Liquidators – P AND R SOLUTIONS LIMITED
Appointment of Liquidators – ANCHOR REMOVALS LIMITED
Appointment of Liquidators – ASCO ASSOCIATES LIMITED
Appointment of Liquidators – RHEIDOL BUILDERS (WALES) LIMITED
Appointment of Liquidators – D S DEVELOPMENTS (SW) LIMITED
Appointment of Liquidators – MAGNUM FRESHTIME LIMITED
Appointment of Liquidators – GARETH OWEN REES LIMITED
Appointment of Liquidators – MICHAEL W HALSALL EXP LIMITED
Appointment of Liquidators – ADAMMS WHOLESALE CARPETS LIMITED
Appointment of Liquidators – GRANTLEY DEVELOPMENTS LIMITED
Appointment of Liquidators – CARMAN (HOLDINGS) LIMITED
Appointment of Liquidators – BEBSIDE FURNACE LIMITED
Appointment of Liquidators – EUROBAKE LIMITED
Appointment of Liquidators – N W CLARKE UROLOGY LIMITED
Appointment of Liquidators – HALLMARK GRANGE FINANCIAL LIMITED
Appointment of Liquidators – AYCE SYSTEMS LIMITED
Petitions to wind up (Companies) – BEINGGREEN LIMITED
Petitions to wind up (Companies) – BALFOUR CIVIL ENGINEERING LIMITED
Petitions to wind up (Companies) – BRAWLINGS FARM LIMITED
Petitions to wind up (Companies) – CONNELL OPERATIONS LTD
Petitions to wind up (Companies) – FUNNYFUZZY UK CO., LTD.

Why you should become a member of CPA!

The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments.  With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.

Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.

Under your annual subscription you will have access to our main services:

1. Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
2. Our monitoring service will alert you to any significant changes in the status of those customers.
3. Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.

All of the above services and other complimentary services such address verification, are included in your subscription!

And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.

CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.

Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!

Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.

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.

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

Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!

If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?

CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.

Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.

Just call  020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.

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

Get compensated for previous late payments

Have you been paid late by business customers in the last six years?

Maybe you no longer work with them. Under legislation, you are entitled to  compensation you for those late payments you have suffered.

You put up with the PAIN – now claim the GAIN!

Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!

CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients

Check our compensation calculator to see how much your business could be owed!

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.