Business news 2 August 2023

James Salmon, Operations Director.

Companies face financial distress as costs rise and spending declines. Business confidence falls amid concerns over rising interest rates. Recession warning over rate hikes. Manufacturing sector records worst month of the year. Tax office accused of ‘scattergun’ approach, hurting Small Business. And more business news that we thought would interest our members.

Companies face financial distress as costs rise and spending declines

Companies are registering increased levels of financial distress as directors grapple with rising costs and a downturn in spending by both consumers and businesses.

The number of companies in significant distress rose by 8.5% in Q2, hitting 438,702, according to research by Begbies Traynor.

The highest numbers of companies in difficulty were in the support services, construction, and real estate sectors. Businesses reliant on non-essential spending such as leisure providers, travel companies, and hospitality venues also showed high levels of distress. Analysis shows that UK-listed companies issued 66 profit warnings between April and June this year, with the construction sector making up 10% of the total.

The report warns that companies that had previously “clung on” are now coming under pressure from higher financing costs. “Many of these will have been the so-called zombie companies which were marginally profitable in the era of low rates,” said Ric Traynor, executive chairman of Begbies Traynor.

Those who bury their heads in the sand over the economci climate leave themselves in a very vulnerable position.

If your business is in distress, before you consider turning to insolvency,  talk to CPA about our LPC service that is unlocking cash for B2B businesses.

It is little known and little utilised but businesses are  entitled to compensation for any late payments they have had from business customers, going back six years. That compensation could make all the difference to your cashflow.  Its a complex field but CPA are experts at calculating and claiming this compensation. CPA’s unique service is unlocking these claims for our clients and recovering the compensation due.

And if you are worried about your customers being in distress, owing your business on outstanding invoices, ask about our Overdue Account Recovery service which can get your bills prioritised over others and resolves an average of 84% of referred accounts quickly and efficiently.

Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email today.

When you see your money come in, you will be so glad you used CPA.

Business confidence falls amid concerns over rising interest rates

Business confidence fell in July as concerns over rising interest rates impacted the outlook for the UK economy. The Lloyds Bank Business Barometer dropped by six points to 31%, although it remained above the long-term average of 28%. The decline in sentiment was driven by the sharpest monthly fall in optimism since June 2022, with net optimism declining by 11 points to 21%, the lowest level since January. However, companies were more positive about their trading prospects, with the net balance between those anticipating stronger and weaker business activity rising to 42%, the highest level in 14 months.

Recession warning over rate hikes
With the Bank of England expected to deliver its fourteenth consecutive base rate hike, economists have warned that repeated interest rate increases could tip the country into a recession. The Bank’s Monetary Policy Committee (MPC) is expected to back a rise of 0.25 percentage points that would take the base rate to 5.25%.

Martin Weale, a former MPC member, said there is “no doubt” that an increase would increase the risk of recession. However, he noted that rate-setters have to “balance that risk against the need to bring inflation down.” He added: “I do think it is a risk that is better taken than ducked.”

Stephen Millard, of the National Institute of Economic and Social Research, said a fresh hike would “increase the risk” of a recession, although he does not think this week’s forecasted rise will lead to one.

Richard Murphy, professor of accounting practice at Sheffield University, has warned that rate increases “have gone too far,” pointing to “signs of real stress in the economy,” and a “potential private debt crisis on the horizon.” “We need to stimulate the economy rather than try and slow it. This is the moment to say enough is enough,” he argues.

Manufacturing sector records worst month of the year

The UK manufacturing sector endured its worst month of the year in July as demand for goods weakened further both at home and abroad. The S&P Global/CIPS manufacturing PMI fell to 45.3, down from 46.5 in June. British manufacturers have been struggling under the weight of high energy prices and a weaker domestic and global economy. The number of people working in the industry fell for the tenth consecutive month and at the fastest rate this year. Despite falls in the costs of raw materials and energy, manufacturers did not reduce prices for buyers last month. The report notes that input cost inflation fell for a third consecutive month as pressures on transport and energy prices eased.

Rob Dobson, director of S&P Global Market Intelligence, said: “Domestic and export demand are weakening and backlogs of work are declining sharply, all of which likely presages further cutbacks to production, employment and purchasing in the months ahead.” Martin Beck, chief economic adviser to the EY Item Club, warned that producers would “struggle over the rest of this year as rising borrowing costs and still-high inflation continue to squeeze household and corporate budgets.”

HMRC ‘chaos’ driving delays

The Mail’s Angharad Carrick warns of “chaos” at HMRC, saying the push for a digital tax system has seen delays in some people receiving basic tax information, while the closure of the self-assessment helpline until September has drawn criticism from business owners required to log quarterly tax returns by July 31. A Public Accounts Committee review shows that HMRC responded to 39.5% of mail within 15 days in 2021/22, compared to 70.3% in 2019/20, while the average speed of answering calls has increased from 6:39 minutes in 2019/20 to 12:22 minutes in 2021/22. Meanwhile, the number of staff has fallen from 25,500 to 19,500 in five years. In a letter to the Chancellor, signatories including the chief executive of the Chartered Institute of Taxation said “a major underlying problem is insufficient resourcing and underinvestment in HMRC’s systems.”

Tax office accused of ‘scattergun’ approach, hurting Small Business

Business leaders have warned that issues with the tax office – including delays, a reduction in certain services and unnecessary investigations – are hurting small businesses. HMRC has been accused of “suffocating” entrepreneurs with a “scattergun” approach to tax investigations. Seb Maley, CEO of tax insurance provider Qdos, said: “If tax hike after tax hike wasn’t enough to contend with in recent years, HMRC’s approach to policing and subsequently enforcing tax compliance leaves a lot to be desired.” He went on to warn that small businesses are “losing confidence” in HMRC and urgent change is needed to regain a “responsive, well-sourced” tax body.

House prices see steepest fall in 14 years
House prices fell at the fastest annual rate for 14 years in July, according to data from Nationwide. The 3.8% year-on-year decline was the steepest since July 2009. The fall took the average UK house price to £260,828, with this around £13,000 – or 4.5% – below a peak recorded in August 2022. Month-on-month, prices were down 0.2% in July. Noting that housing affordability “remains stretched” for those hoping to buy a home with a mortgage, Robert Gardner, Nationwide’s chief economist, said a “challenging affordability picture helps to explain why housing market activity has been subdued in recent months.”

Scrapping ‘tourist tax’ could unlock Brexit boost

Analysis by the Association for International Retail (AIR) suggests that scrapping the tourist tax could see a surge in European shoppers making tax-free purchases in the UK. The trade body estimates Europeans would spend £5.1bn on tax-free shopping per year, with the extra visitors delivering an additional boost to spending at hotels and restaurants. While the Treasury estimates that there would be up to 50,000 extra EU visitors if tax-free shopping was reintroduced, AIR says figures from Europe suggest that the number who would make tax-free reclaims is around 2.3m. AIR chief executive Paul Barnes said: “Britain is currently missing out on a post-Brexit boom as it would become the only major country in Europe where 450m EU residents could spend tax-free.”

UK Energy

Representatives of the UK Energy industry will meet today with the Energy Security Secretary Grant Shapps to discuss existing plans by the companies to invest more than £100 billion into the UK’s energy industry including spending on renewables, nuclear power, and North Sea oil and gas and their impact on the nations energy security and how accelerating investments can be accelerated. The meeting at Downing Street, will include the bosses of Shell, BP, SSE, Electricite de France and National Grid.


Ryanair said that it carried 18.7 million customers in July, up 11% year-on-year from 16.8 million. The load factor, however, was unchanged at 96%. On a rolling 12-month basis, the Dublin-based low-cost airline carried 175.3 million customers, up 23% from 142.0 million a year ago. The load factor improved to 94% from 87%. Ryanair noted that it operated over 102,000 flights in July, however over 800 flights were cancelled due to third-party strikes

BAE Systems

BAE Systems reported that revenue in the first half of 2023 rose to £11.00 billion from £9.74 billion a year earlier. The defence contractor said pretax profit climbed to £1.20 billion from £779 million.

Taylor Wimpey

Taylor Wimpey said it has had a “resilient” first half performance with completions slightly ahead of its expectations. In the six months ended July 2, the housebuilder’s revenue fell 21% to £1.64 billion from £2.08 billion a year earlier. Pretax profit plummeted 29% to £237.7 million from £334.5 million.

US credit rating

Fitch downgraded the US’ top-notch credit rating by a step on Tuesday, citing a growing federal debt burden and an “erosion of governance” that has manifested in debt limit standoffs. The decision to downgrade the US from AAA to AA+ sparked a fiery rebuttal from the White House, with press secretary Karine Jean-Pierre saying the move “defies reality.” Treasury Secretary Janet Yellen said in a separate statement that she “strongly” disagreed with Fitch as well, calling the change “arbitrary and based on outdated data.”

Latest Insolvencies

Appointment of Administrator


Winding Up Petitions


Appointment of Liquidator


Why should you become a CPA member!

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 some time to come.

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.

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

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email 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 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 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.