Business news 9 August 2024
Repossessions rise! Cooling jobs market to lead to rate cuts? property sales pickup, families, HMRC, pensions, crypto CGT, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Repossessions rise by 31%
More evidence than consumers are hurting on high interest rates.
The number of home repossessions has soared to the highest level in five years, data from UK Finance shows. Mortgage possession claims increased by 34% year-on-year in Q2, climbing from 3,991 to 5,343. These involve a lender taking homeowners to court before repossessing their home as the owners have fallen behind on their mortgage repayments.
The report shows that 980 mortgaged properties were repossessed in Q2. This is up 8% on Q1 and 31% on Q2 2023. A further 710 buy-to-let (BTL) mortgaged properties were repossessed. This marks a 13% increase on the previous quarter and is 51% up on the year before. UK Finance analysis shows that the overall proportion of mortgages in arrears remains low at 1.10% of homeowner mortgages and 0.69% of BTL mortgages.
Are you a B2C seller. If you are giving credit to consumers, do you have late payers? Why not talk to CPA. Our Overdue account recovery service resolves over 80% of accounts referred to us although our collections department is there to escalate the collections process on the remaining few if you require it.
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
Cooling jobs market raises rate cut possibility
The prospect of the Bank of England cutting interest rates further in the near future has been raised after a report from the Recruitment and Employment Confederation and KPMG suggested the UK jobs market is showing signs of cooling. Researchers found the pace of pay rises slowed last month, while the hiring of temporary and permanent staff continued to decline. The report, based on a survey of around 400 recruitment and employment consultancies in July, said vacancy numbers also fell for the ninth month in a row. The findings will be closely watched by the Bank of England, which cut interest rates for the first time in more than four years earlier this month after inflation fell back to its 2% target. Governor Andrew Bailey had previously expressed concern that the pace of salary increases was helping to fuel inflation, contributing to the Bank’s decision to raise rates.
Property sales set to pick up, surveyors say
Surveyors expect property sales to pick up in the autumn. The Royal Institution of Chartered Surveyors (RICS) says expectations of a rise in sales have reached their highest level since the start of 2020, with surveyors expecting activity to pick up over the next three months and more predicting an increase in the year ahead. RICS chief economist Simon Rubinsohn said: “Significant challenges lie ahead in delivering on the ambitions around planning reform and it is far from clear that the Bank of England will follow the August move with further easing over the coming months … But, even so, the policy mix is becoming more supportive for the sector.”
Give couples tax break to have more children, says think-tank
A report by think-tank Onward suggests that parents should be given a £5,000 tax break to encourage families to have more children. Data shows that birth rates in England and Wales hit a record low in 2022 and the Onward report suggests that parents feel as though they are priced out of having a larger family by factors such as childcare costs. Onward says a £5,000 child tax allowance could benefit 12.6m working parents and save them an average of £2,000 a year in real terms. It calculates that freezing the personal tax allowance at £12,570 for all workers except parents would raise £2.5bn a year. If working parents did not have to pay income tax on anything earned between £12,570 and £17,570, it would mean a £1,000 tax saving per parent. Phoebe Arslanagić-Little of Onward said: “Britain is unusual among developed countries in its failure to support families through the tax system,” adding that this “contributes to the financial barriers to parenthood.”
Markets
US Unemployment Claims totaled less than expected last week, countering other signs that the labor market is weakening. First-time filings for jobless benefits came to a seasonally adjusted 233,000 for the week, a decline of 17,000 from the previous week’s upwardly revised level and lower than the Dow Jones estimate for 240,000.
JP Morgan has estimated that around three quarters of yen carry trades have now unwound with the recent reversal cancelling out equity market gains of 2024.
Yesterday, the FTSE 100 closed down 0.27% at 8144.97 (as the pound climbed against the dollar) and the Euro Stoxx 50 closed up 0.01% at 4668.74. Overnight in the US, off the back of the unemployment data, the S&P 500 rose 2.3% to 5319.31 and the NASDAQ rose 2.87% to 16660.02.
This morning on currencies, the pound is currently worth $1.2764 and €1.1695. On Commodities, Oil (Brent) is at $79.05 & Gold is at $2423. With stock markets, the FTSE 100 is up 0.52% at 8188 and the Eurostoxx 50 is up 0.61% at 4698.
£1.2bn pumped into fund market in June
Data from the Investment Association shows that UK investors poured £1.2bn into funds during June. While over £24bn was pulled from funds in 2023, H1 2024 saw £1.7bn added. Inflows to index trackers totalled £15.1bn in the first half of the year, with this exceeding the £13.8bn recorded across the whole of 2023. Investors pumped £1.2bn into equities in June, with this taking H1’s total inflows to £424m. Miranda Seath, director of market insight and fund sectors at the Investment Association, said: “Investor confidence has been building throughout Q2 2024 as inflation has calmed.” Highlighting that the Bank of England has announced the first cut in the base rate since March 2020, she added: “This decision could help to improve confidence and flows as we head into the second half of 2024.”
Pension schemes to be rated for transparency
Pension schemes will be publicly rated to provide savers with greater transparency on the performance of funds, under new rules proposed by the Financial Conduct Authority (FCA). The plans will see schemes rated red, amber or green on a range of metrics, including investment performance and service quality, rather than just focusing on costs and charges. “Poorly performing schemes will be required to improve or ultimately protect savers by transferring them to better schemes,” the FCA said in a statement.
HMRC issues ‘nudge’ letters over crypto tax
HMRC has started sending ‘nudge letters’ to Britons suspected of failing to pay the correct tax on their cryptocurrency gains. The letters warn recipients that they may face interest on late payments and penalties if an assessment finds additional tax owed on previously undisclosed crypto gains. HMRC considers the profits or losses from buying and selling exchange tokens as subject to capital gains tax. BDO warns that the letter targets those who have “disposed” of crypto assets, including exchanging one cryptocurrency for another or using cryptocurrency for purchases. HMRC already collects transaction data from crypto platforms and will soon receive it automatically under the Crypto Asset Reporting Framework. Last year, HMRC introduced a specific disclosure process for crypto owners to report any unpaid tax on crypto assets. Paul Falvey, a tax partner at BDO, said: “Many owners of crypto assets may not be fully aware of their obligations and may not have filed a tax return before. They could well get a shock when this letter hits the doormat – but the worst thing they could do is to ignore it.”
Landlords selling up amid CGT raid fears
A number of landlords are selling up over fears that the Government is planning a capital gains tax raid that could drive up their bills. Analysis by the Royal Institution of Chartered Surveyors (RICS) shows that the number of new landlords instructing estate agents across the country fell 16% in the three months to July. The RICS report said “yet more legislation” and concerns over an “unfair” tax regime mean that being a buy-to-let investor is increasingly less appealing. Matthew Spencer, tax partner at law firm Kingsley Napley, said: “Given we were told public finances are in a dire state and that efficiencies and reducing tax avoidance/evasion can only go so far, I now firmly believe capital gains tax rates will be increased.” He added: “Those planning to sell real estate in the near future may be in for a nasty shock later this year.” It has been suggested that the Chancellor could increase CGT rates to match income tax. Sarah Coles, head of personal finance at Hargreaves Lansdown, says this could deliver a “shocking hike for UK investors.”
Disney
Disney plans to spend at least $5 billion in the UK and elsewhere in Europe over the next five years to produce movies and TV shows.
Hargreaves Lansdown
Britain’s biggest platform for retail investors has agreed to sell itself for £5.4 billion to a consortium of private equity funds, CVC, Nordic Capital and a unit of Abu Dhabi Investment Authority, marking another large exit from the London public market.
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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 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.
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.
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 turning to more debt, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cash flow, then talk to CPA about how we can help you reduce those late payments.
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. CPA’s overdue account recovery service is a polite, efficient service designed to encourage prompter payments while maintaining goodwill. We direct your customers to pay directly to you, not to us and want to support and reinstate your direct relationship with your customer, not take it over, destroying goodwill.
Unlike other credit management companies, our overdue account recovery service is available to our members on a fixed annual subscription so you can pass any overdue accounts to this service and it is included in your subscription!
Our Overdue account recovery service resolves over 80% of accounts referred to us although our collections department is there to escalate the collections process on the remaining few if you require it.
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 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.