Business news

4 November 2022

James Salmon, Operations Director.
  • Late payments hit 2 year high for Small Business.
  • BOE says UK set for longest ever recession.
  • Services PMI shrinks as customers reduce spending.
  • House prices predicted to fall from 10 to 30%.
  • And more business news.

Late payments hit 2 year high for Small Business.

According to research from Xero invoices for small businesses were paid late by an average of 8.2 days in September, the highest late payment time since August 2020.

This compares with 6.5 days in Australia and 6.2 days in New Zealand.

Xero is echoing the calls from CPA for tougher penalties on late payers

Liz Barclay, Small Business Commissioner, questioned whether new legislation would fix the problem of late payments in the immediate term, given the lengthy nature of creating new laws. She said “As the cost of doing business escalates, companies waiting for payments to come in will delay paying companies they owe money to, to try to stay afloat,” she says. “Legislation to speed up payments, if it was decided that’s what’s required, would take time to progress through the legislative process.”

Instead, she said the focus should be on improving the relationship between big business and its suppliers, and promoting ethical leadership at the top of big companies. “We need companies to understand now that if they don’t pay faster their suppliers will have gone to the wall, leaving them in danger of going to the wall themselves as they struggle to find new suppliers,”

Small businesses can negotiate better terms away from the 30 to 60 days offered by big business customers. They can also tighten their credit control procedures.

Are you affected by late payments?  Don’t accept it as inevitable. CPA helps small businesses encourage prompt payments without damaging the relationship with the customer.

See the section below “Why you should become a CPA member” or just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email today.

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

Our Late payment compensation service can also be used to collect compensation from former customers who systematically paid late over the last 6 years (see below).

UK set for longest ever recession, says BoE

And late payments don’t look set to improve. The Bank of England has warned the UK is facing its longest recession, with a projected eight quarters of falling GDP. The Bank has warned that the economy has entered a “challenging” downturn. GDP is forecast to fall 0.75% in the second half of 2022 and remain in recession through 2023 and the first half of 2024. Inflation is expected to peak at 11% and unemployment, which is currently at 3.5%, is forecast to hit 6.5%.

This came as the Bank’s Monetary Policy Committee lifted interest rates from 2.25% to 3% as it looks to tame soaring inflation. The 0.75 percentage point rise, which is the Bank’s eighth increase since December and the steepest since 1989, takes borrowing costs to their highest level in 14 years. The BoE’s Monetary Policy Committee voted 7-2 to hike the UK bank rate by 75 basis points, to 3%, while noting that inflation is expected to slow next year after peaking in the final quarter of 2022. One member voted for a 0.5 percentage point rise while one preferred a 0.25 increase.

Chancellor Jeremy Hunt said the Government’s priority is to rein in inflation, saying the Bank has “taken action in line with their objective to return inflation to target.”

London markets had initially opened lower, however, the pound dipped in response to the Bank of England’s announcement which in turn sent the more internationally-focused blue-chip index higher.

Raising rates ‘a blunt instrument’ – BCC

David Bharier, head of research at the British Chambers of Commerce, has warned that increasing interest rates is “a very blunt instrument” to control inflation which is largely fuelled by global factors. Calling on ministers to set out “a long-term plan that stabilises the economy and focuses on growth,” Mr Bharier said that with the Chancellor and Prime Minister signalling that the Autumn Statement is set to deliver spending cuts and tax rises, “businesses will be extremely worried about what the future holds.”

Kitty Ussher, chief economist at the Institute of Directors, pointed to data showing that business leaders think inflation has yet to peak – while many think it may do so in early 2023. She added that yesterday’s interest rate rise is “therefore the least worst option to anchor inflation expectations firmly at a lower level in the interests of overall macroeconomic stability.”

Alpesh Paleja, lead economist at the CBI, said: “With monetary policy focused on tackling inflation, the Government’s immediate priority should be to reinforce markets’ faith in the UK’s hard-won reputation for stability — but fiscal sustainability and growth shouldn’t be an either/or choice.”

Services PMI shrinks as customers reduce spending

Activity in Britain’s services sector contracted last month, shrinking for the first time since the start of the third lockdown in January 2021, according to the S&P Global UK services PMI. The index fell to 48.8 in October, below the threshold of 50 which signifies growth but ahead of an initial flash reading of 47.5. The sector, which accounts for 80% of the economy, warned of shrinking demand and greater risk aversion among customers amid heightened political and economic uncertainty. Firms also saw higher costs on the back of rising energy bills and wage pressures. The composite PMI, which combines the services and manufacturing surveys, fell to 48.2 in October from 49.1, the lowest reading since January 2021.

Savills: Prices set to fall by 10% in 2023

Is your business exposed to the housing market?  House prices are set to fall by an average of 10% next year, according to estate agency Savills, with it forecasting that the number of sales could fall by around 190,000. Lucian Cook, the head of residential research at Savills, said that while the housing market has remained “remarkably strong” through the first nine months of the year, “demand dynamics changed over the autumn with the realisation that the Bank of England would need to go faster and further to tackle inflation.” Savills expects that prices and sales will start to recover in 2024, with price growth averaging 1%. It forecasts that price growth will then hit 3.5% in 2025 and climb to 7% the year after.

But house prices could fall 30%
Chris Rhodes, chief finance officer at Nationwide Building Society, has told the Treasury Committee that house prices could fall by almost a third in the worst-case scenario. He added that the best case is “slowly increasing house prices,” while noting that these represent “two extremes which are tail probabilities.” Mr Rhodes said the “weighted average” is around 8% to 10% but insisted that it was “not a forecast.” Nationwide data shows that house prices fell by 0.9% month-on-month in October to an average of £268,282, while annual growth slowed to 7.2% in October from 9.5% in September.

Harbour Energy in windfall tax warning
Harbour Energy, the UK’s biggest oil and gas producer, has warned the Government to “carefully consider the consequences” of another windfall tax on the sector. The firm said an extension or expansion of the policy risked undermining investments that would boost the UK’s energy security and help it reach net-zero targets.

Hunt set to target CGT, dividends and non-doms

Jeremy Hunt is reportedly considering an increase in the headline rate of capital gains tax (CGT) and taxes on dividends in his Autumn Statement. With the Chancellor looking to plug the £50bn hole in public finances, he is said to be mulling changes to the headline rate, reliefs and allowances on CGT. He is also considering an increase in dividend taxes and reducing the £2,000 tax-free dividend allowance. Craig Beaumont, chief of external affairs at the Federation of Small Businesses, said: “The rise as mooted is another deterrent to becoming an entrepreneur. Owner-managers who pay themselves through dividends were largely left out of pandemic-era income support schemes.” He added that disincentivising entrepreneurs would be a “short-sighted move” from the Chancellor.

Elsewhere, George Dibb of the Institute for Public Policy Research IPPR think-tank said: “Rumours that the Government is going to scrap the dividend tax allowance are welcome, but we think the Government should go further and start taxing dividends at the same rate as income tax.”

Meanwhile, the Guardian reports that Treasury officials are examining the possibility of changes to non-dom status. Changes being reviewed by the Treasury’s high net worth individuals policy team include reducing the time period over which high net worth individuals can avoid tax on their worldwide income

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 charge our members a fixed annual subscription irrespective of how high the debt value is!

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 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 – 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.