Business news 2 September 2024
Labour gloom triggers a collapse in confidence. Labour’s tax honesty under fire. Mortgages, 4 day week, unions, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Labour gloom triggers a collapse in confidence
Confidence among business leaders has plummeted amid fears of a Labour tax raid and a slew of new employment rights. According to the Institute of Directors, which represents 20,000 business leaders across the country, sentiment has plunged from a three-year high of +7 in July to -12 in August. Bosses have scaled back plans for hiring and investment at the fastest rate since the pandemic over the last month. Anna Leach, chief economist at the IoD, said: “As we head into a busy autumn, we are calling on the Government to take time to get policy design right for the long term, and deliver the stable tax and policy framework needed to drive business confidence and investment.”
Labour’s tax honesty under fire
According to a recent BMG Research poll for i, over half of voters believe Labour was dishonest regarding its tax plans during the general election campaign. Specifically, 56% of respondents felt that Sir Keir Starmer’s party was “not very honest” or “not honest at all.” Among Labour voters, 30% expressed similar concerns about the party’s honesty. The poll revealed that many voters associate potential increases in fuel duty and inheritance tax with a breach of Labour’s election promises not to raise taxes on “working people.”
Mortgage approvals soar to new heights
The number of mortgages approved for home buyers reached 62,000 in July, the highest since September 2022, according to the Bank of England’s Money and Credit report. This increase from 60,600 approvals in June indicates a potential upward trend in housing activity for the remainder of the year. Thomas Pugh, an economist at RSM UK, remarked: “The jump in net mortgage approvals to 62,000 in July strongly suggests that housing activity will continue to trend upwards over the rest of this year.” Despite a slight dip in house prices of 0.2% month-on-month in August, the annual growth rate rose to 2.4%, the fastest since December 2022. Experts predict further increases in mortgage approvals as interest rates decline, with Rob Wood from Pantheon Macroeconomics forecasting a rise to 65,000 in the coming months.
Labour says four-day working week will not be imposed
The UK Government is considering proposals that would allow employees to request a four-day working week, enabling them to work their usual hours over fewer days. Ministers deny employers will be forced to allow staff to work four-day weeks, or make employees work a four-day week. However, shadow business secretary Kevin Hollinrake said businesses were “petrified” by Labour’s Make Work Pay plans. “Despite warning after warning from industry, Angela Rayner is pressing ahead with her French-style union laws that will make doing business more expensive in the UK,” Mr Hollinrake said. “Labour must listen to businesses who are petrified about day one employment rights and bringing in the four-day week through the back door.”
Yellow Pages CFO in court accused of fraud
Former finance chief of Yellow Pages, Tony Bates, has been charged with multi-million-pound fraud, accused of concealing the company’s true financial position for personal gain. Shareholders allege that Bates provided the Stock Exchange with false information, leading to the company’s collapse. Meanwhile, Bates and his fellow executives shared a £6.5m payout in the year of the company’s failure. Bates denied all ten counts of fraud during the initial hearing at Highbury Corner Magistrates’ Court. The prosecution is a private case initiated by former shareholders in Yell after the police and regulators declined to act. Bates’ barrister, Stuart Biggs, argued for the case to be dismissed, stating: “This is a criticism of Mr Bates in his role as chief financial officer of a group of companies that went through a restructuring.” But Judge Brennan referred the case on to Reading Crown Court for its next hearing, in October.
Tax hike fears drive asset sales, benefitting Labour
Reports keep coming of entrepreneurs fleeing the UK ahead of expected hikes to capital gains and inheritance tax in Labour’s October Budget. The Sunday Telegraph details the exodus as recounted by bankers, financial advisers and business chiefs. Ceri Vokes, a partner at Withers Worldwide, says clients are heading mostly to Italy, the UAE and Switzerland. Moore Kingston Smith’s head of tax Tim Stovold said people’s decisions had become “entirely tax-driven” due to fears over a CGT raid, explaining that this was proving advantageous to the Government which is getting revenue sooner than it would have done otherwise. Elsewhere, Johanna Noble sets out reasons for not raising CGT in the Sunday Times, pointing out that HMRC’s own calculations show that a 10 percentage point increase in the higher rate of CGT could lead to a £400m fall in tax take in 2025-26, followed by a £985m drop in 2026-27, and £2bn in the year after – because people’s behaviour will change if the tax increases.
VAT raid ‘could cost taxpayer £1.8bn’
Analysis by the Adam Smith Institute indicates that many parents who cannot afford to keep their children in private education because of Labour’s VAT hike on fees may well decide to work less after switching their children to state education and freeing up capital. The free market think tank estimates that if these parents work 40% less it will cost the Treasury between £360m and £1.81bn, depending on how many pupils migrate to the state sector. the Adam Smith Institute also says Labour’s assumption that the VAT change will result in between 3% and 7% of pupils moving to the state sector is flawed and it will more likely be over 15%, meaning the policy could have a net cost to the taxpayer.
LGA wants free reign to hike taxes
The Local Government Association (LGA) is calling on the Chancellor to give council bosses unlimited power to raise taxes on residents in her Budget next month. Under current rules, council tax is only allowed to be raised by a maximum of 5% per year, unless approved through a local referendum. Cllr Pete Marland, chair of the LGA’s economy and resources board, said: “It should be for councils and their residents to decide how local services are paid for, not Whitehall. No other tax increase is subject to the extra cost of a referendum, as all other taxes are rightly seen to be within the mandate of the elected government. The same should apply for council tax. The ballot box on local election day allows for people to pass judgement on their councils.”
Some landlords are bucking the exit trend
Despite a challenging environment for buy-to-let investors, including high interest rates and increased regulation, some landlords are expanding their portfolios. Research from Hamptons indicates that while overall buy-to-let purchases are at a record low, areas like Middlesbrough and Derby are seeing increased demand, with yields reaching 9% in some locations. Aneisha Beveridge from Hamptons notes that investors are now more yield-focused due to tax changes and rising mortgage rates. Newer landlords are often better educated about the market, with many taking courses to enhance their investment strategies.
Fabian Society plots pensions raid
The Fabian Society is calling for the Government to cut the amount of money pensioners can take out of their retirement pots without paying tax. The Left-wing think tank wants the amount reduced from £268,000 to £100,000. It is also recommending a flat rate of pension tax relief of 25-30% and an inheritance tax on pensions. The Fabian Society believes its proposals could net the Exchequer at least £10bn. However, the think tank has suggested a carve-out for defined benefit (DB) schemes, meaning those in the employ of the state still get a large proportion of tax relief.
Labour’s smoking ban could spark more pub closures
Labour’s proposed ban on smoking in pub gardens has raised significant concerns among landlords and industry experts that the restrictions could lead to violent confrontations outside pubs and ultimately their closure. Pubs are already under enormous financial strain and last year saw the highest level of closures in a decade, according to research by Price Bailey. The British Beer and Pub Association is calling on the Government to not go ahead with the proposal, which many say is unenforceable anyway.
Tourist tax costs UK £4.3bn
According to research from Global Blue, UK businesses lost up to £4.3bn this summer due to the tourist tax, with £3.8bn lost from EU visitors and £500m from those from the US, China, and the Middle East. The data suggests that if the tax were abolished, the UK could have attracted £1.9bn in spending from EU residents alone. They would have gone on to spend the same on hotels, restaurants and other activities, adding up to £3.8bn. Critics claim the current tax structure diverts spending to cities like Paris and Madrid, leaving British retailers at a disadvantage.
Reeves: Tough choices will make the country better off
Rachel Reeves writes in the Observer on her plans for the economy, asserting that Labour will being back stability – setting the foundation for businesses to thrive and government investment. The Chancellor outlines areas of overspending by the previous government and the £22bn black hole the Treasury claims has been left by the Tories. Reeves goes on to say the Government has already made tough decisions to rein in spending and has its sights set on a “decade of national renewal” to “unlock growth, spread prosperity and make every part of our country better off.” Elsewhere, David Smith warns in the Sunday Times that Labour risks pushing the UK back into stagnation if it fails to realise a growth-focussed agenda. “It’s all a little worrying. Growth would make squaring the circle easier, but the mood that Labour’s gloomy approach is generating, and the prospect of growth-limiting tax hikes, makes that task harder.”
Mick Lynch: Media peddling scare stories about unions
Mick Lynch, the secretary general of the National Union of Rail, Maritime and Transport Workers, says in the Guardian that with a Labour government in place, unions are better positioned to improve conditions for British workers. He rails against recent media portrayals of unions as a threat to the country and insists the RMT is not affiliated to any political party. “September will be the first TUC congress under a Labour government in 15 years. Instead of peddling scare stories about unions that bear no relation to the truth, the media should see the gathering as the vital voice that all workers need if we are to make the changes in society we want to see and encourage Labour in the right direction.”
Barratt expected to report fall in completions
Barratt Developments is expected to report a fall in home completions when it reports its annual results on Wednesday. However, profits are predicted to come in just ahead of previous expectations. The company had projected a fall in July but despite buyer sentiment appearing to improve, Susannah Streeter at Hargreaves Lansdown suggests Labour’s downbeat assessment of the UK’s finances “could prompt fresh wariness among buyers.” Vistry and Berkeley Group will have updates in the following days.
Markets
Friday, the FTSE 100 closed 0.04% at 8376.63 and the Euro Stoxx 50 closed down 0.17% at 4957.98. Over in the US the S&P 500 rose 1.03% to 5648.40 and the NASDAQ rose 1.13% to 17713.63.
Global equities began September slipping as investors prepared for what’s typically considered the most challenging month for stock markets.
This morning on currencies, the pound is currently worth $1.313 and €1.186. On Commodities, Oil (Brent) is at $77 & Gold is at $2500. On the stock markets, the FTSE 100 is currently down 0.13% at 8365 and the Eurostoxx 50 is down 0.19% at 4949.
US & Euro Inflation
US Inflation edged higher in July, according to a measure favored by the Federal Reserve as the central bank prepares to enact its first interest rate reduction in more than four years. The Commerce Department reported Friday that the personal consumption expenditures price index rose 0.2% on the month and was up 2.5% from the same period a year ago, exactly in line with the Dow Jones consensus estimates.
Eurozone Inflation dropped to a three-year low of 2.2% in August, flash figures from statistics agency Eurostat showed Friday, boosting expectations for a September rate cut from the European Central Bank. The decline from 2.6% in July was in line with the forecast of economists polled by Reuters.
Mortgages
UK Mortgage Approvals and consumer credit hit their highest levels in almost two-years and since the September 2022 mini-budget last month. Almost 62,000 mortgages were approved across the UK in July, marking an uptick on June and the highest level since September 2022, Bank of England data showed on Friday.
Natwest
The UK Government has sold off another chunk of shares in NatWest, taking the public’s stake in the bank from 18.99% to 17.97%. This means the government’s stake has been cut by more than half over the course of 2024 so far, ahead of plans for a full exit over the coming year.
The rise of the corporate influencer
The rise of LinkedIn influencers is transforming corporate marketing strategies, as seen with Deloitte’s appointment of Lara Sophie Bothur as their first full-time corporate influencer for operations in Germany, Australia and Switzerland. Her posts on “tech for good” have garnered an impressive 400m impressions, significantly outperforming Deloitte’s own posts. A study by Refine Labs revealed that personal LinkedIn profiles generate nearly three times the impressions and five times the engagement compared to corporate profiles. This trend is not limited to established firms; start-ups like Waterboy and SET Active are also leveraging influencers to enhance brand visibility. Jenna Palek’s collaboration with Waterboy increased their reach from 27,000 to 320,000 views. Meagan Loyst, founder of Gen Z VCs, says companies will need to fight hard to retain influencers who can make a yearly corporate income in just a few partnerships on their own.
Director disqualified after funeral firm collapse
John Lecomber, the sole director of Not For Profit Funeral Plans, has been disqualified for 12 years following the company’s collapse, which left £1.7m of customer funds unaccounted for. Liquidators from Quantuma Advisory discovered significant discrepancies in the company’s financial records, revealing that only £150,000 was paid to the trust fund despite receiving over £2m from customers between June 2019 and July 2022. Kelly Mitchell, managing director of Quantuma, stated: “This has been a highly emotional and unpleasant situation for the plan-holders,” highlighting the vulnerability of many affected clients. The Financial Conduct Authority’s regulation of the prepaid funeral market was prompted by concerns over customer trust money management, leading to several insolvencies, including Safe Hands Plans, which left 47,000 people facing a £60m shortfall
Latest Insolvencies
Appointment of Liquidators – ARGYLE INDUSTRIES LIMITED
Petitions to wind up (Companies) – SPARTA TECHNOLOGIES LTD.
Petitions to wind up (Companies) – FARLOW GROUP LTD
Appointment of Liquidators – PURSER CONSTRUCTION LIMITED
Petitions to wind up (Companies) – HEATH ELECTRICAL SERVICES MK LIMITED
Petitions to wind up (Companies) – WORKING BUSINESS LIMITED
Appointment of Liquidators – CAMPBELL OVERHILL LLP
Petitions to wind up (Companies) – IP LABS COMMUNICATIONS LIMITED
Petitions to wind up (Companies) – TOTAL LOGISTIX LTD
Petitions to wind up (Companies) – ALLAN BIGGAR & COMPANY LIMITED
Petitions to wind up (Companies) – HIVE 360 LIMITED
Petitions to wind up (Companies) – MOAT BRAE TRADING COMPANY LIMITED
Petitions to wind up (Companies) – ADVANCE TRANSPORT LIMITED
Petitions to wind up (Companies) – TIRMAS LIMITED
Appointment of Liquidators – VILLAGE STREET CONSULTING LIMITED
Petitions to wind up (Companies) – UNITED CIVILS NETWORKS LIMITED
Appointment of Liquidators – BURNSIDE CARE HOMES LIMITED
Appointment of Liquidators – S.A. HENDERSON ORTHOPAEDIC SERVICES LTD
Petitions to wind up (Companies) – UNVEILED LTD
Petitions to wind up (Companies) – DAVIDSON 4 LTD
Petitions to wind up (Companies) – SK SEHMI CONSULTING LIMITED
Petitions to wind up (Companies) – HALIFAX RUGBY LEAGUE FOOTBALL CLUB LIMITED
Petitions to wind up (Companies) – ALEXANDERS 2 LTD
Appointment of Liquidators – CAMPBELL KEMP HOLDINGS LIMITED
Petitions to wind up (Companies) – SAM INTERNATIONAL LTD
Petitions to wind up (Companies) – MBCFARMS LTD
Petitions to wind up (Companies) – MAYFAIR INSTALLATIONS LIMITED
Petitions to wind up (Companies) – CALEN HOLDINGS LTD
Appointment of Liquidators – JKR CONTRACTS LTD.
Petitions to wind up (Companies) – WEDO VENTURES LTD
Petitions to wind up (Companies) – FRPG GROUPS LTD
Petitions to wind up (Companies) – B E FACADE LIMITED
Petitions to wind up (Companies) – CHIPCO (BELFAST) LTD
Appointment of Liquidators – SHEFF PRECISION HD LIMITED
Appointment of Liquidators – OXIFY LTD
Petitions to wind up (Companies) – DIAMOND HANGAR LIMITED
Petitions to wind up (Companies) – M&P KITCHENS LTD
Petitions to wind up (Companies) – GLASS & METAL CONSTRUCTION LIMITED
Petitions to wind up (Companies) – A1 TOYS LIMITED
Appointment of Liquidators – ALLAN LETTING & ESTATE AGENTS
Petitions to wind up (Companies) – LIBERTY STEEL DISTRIBUTION LIMITED
Appointment of Liquidators – DEVELOPORRS LTD
Appointment of Liquidators – LITHELP LIMITED
Petitions to wind up (Companies) – 10442565 LTD
Appointment of Liquidators – SHANE RETAIL LTD
Petitions to wind up (Companies) – LIBERTY FINANCE MANAGEMENT (LIG) LTD
Petitions to wind up (Companies) – IMPERIUM BUILDING SERVICES LTD
Petitions to wind up (Companies) – SABRI CONSTRUCTION LTD
Petitions to wind up (Companies) – THERMAGLAZE SOUTHWEST LIMITED
Appointment of Liquidators – FOX CONSULTANCY SERVICES LIMITED
Appointment of Liquidators – BACK2NORMAL LIMITED
Petitions to wind up (Companies) – KTJ COMMUNICATIONS LTD
Appointment of Administrator – LIBERTINE HOLDINGS PLC
Petitions to wind up (Companies) – TANGIBLE HAPPINESS LTD
Petitions to wind up (Companies) – ARGO TRANSPORT LTD
Appointment of Liquidators – CLANDEBOYE DENTAL CLINIC LIMITED
Petitions to wind up (Companies) – VISTA FM LTD
Appointment of Administrator – THE BURDENS GROUP LIMITED
Appointment of Liquidators – EUROSITE POWER PROJECTS LIMITED
Appointment of Liquidators – REVOLUTION FINANCE LIMITED
Petitions to wind up (Companies) – COMFORT AND CARE SERVICES LIMITED
Petitions to wind up (Companies) – HIERONS LLP
Appointment of Liquidators – CREATEFUTURE TWO LIMITED
Petitions to wind up (Companies) – ENERGY ONE WORLD LIMITED
Petitions to wind up (Companies) – IZZY HOME STORE LIMITED
Winding up Order (Companies) – ALEXANDER PERSONAL MANAGEMENT LIMITED
Winding up Order (Companies) – ROM MAI THAI CUISINE LTD
Appointment of Liquidators – LODGE NIELSEN LTD
Appointment of Liquidators – GOOGOL HOLDINGS UK LIMITED
Appointment of Liquidators – LITCHFIELDS PROPERTY SERVICES LIMITED
Petitions to wind up (Companies) – THE ESCAPE DALSTON LIMITED
Petitions to wind up (Companies) – CENTURION ESTATE PLANNING GROUP LTD
Appointment of Liquidators – CYBERSEC CONSULTING LIMITED
Petitions to wind up (Companies) – POLSKIE SMAKI 3 LTD
Appointment of Liquidators – KEVIN FOSTER CONSULTING LIMITED
Petitions to wind up (Companies) – DRIVEWAY SURFACING PLUS LTD
Appointment of Liquidators – HANOVER FINANCE NO.1 LIMITED
Appointment of Liquidators – PETT HAMMETT LIMITED
Appointment of Administrator – CFEC LIMITED
Appointment of Administrator – FACET INVESTMENT MANAGEMENT LTD
Appointment of Liquidators – LAM TESTING SOLUTIONS LTD
Appointment of Liquidators – E-CARAT 12 PLC
Appointment of Liquidators – THNKPRODUCT LTD
Appointment of Administrator – KENSINGTON PARKING CENTRE LTD
Appointment of Liquidators – CAREY (GUNMAKERS) LIMITED
Appointment of Administrator – GENACTIS GROUP LIMITED
Appointment of Liquidators – ABOVE PAR IT LIMITED
Appointment of Liquidators – FERLESTE LTD
Appointment of Liquidators – RIDINGS RESIDENTIAL LIMITED
Appointment of Liquidators – REGTEK SOLUTIONS UK LTD.
Appointment of Liquidators – CATAPULT-IT LTD
Appointment of Liquidators – TIMBER TEC FENCING LIMITED
Petitions to wind up (Companies) – GLANCY CONSTRUCTION LTD
Appointment of Liquidators – GREENLAND RETAIL SOLUTIONS LTD
Appointment of Liquidators – MULTIPAVE LIMITED
Appointment of Liquidators – HORTICULTURAL SUPPLIES LTD
Appointment of Liquidators – GREYHOUND HOMES LIMITED
Petitions to wind up (Companies) – DOBSON CONTRACTING LTD
Appointment of Liquidators – DEREK SACH ASSOCIATES LIMITED
Appointment of Liquidators – ML CONSULTING SERVICES LIMITED
Appointment of Liquidators – INFINITE IDEAS LIMITED
Appointment of Liquidators – LUKE CHANNINGS CONSULTING 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:
- 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.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- 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.