Business news 12 April 2023
James Salmon, Operations Director.
UK set to be among worst-performing economies according to the IMF. Companies entering administration hits three-year high. EU bankruptcies set to exceed UK total. Workers returning to jobs market. Hunt urged to cut taxes . Millionaires call for wealth tax.
IMF: UK set to be among worst-performing economies
The UK is set to be one of the world’s worst performing major economies this year, according to a forecast from the International Monetary Fund (IMF). The report says the UK economy’s performance in 2023 will be the worst among the G7, predicting that the economy will shrink by 0.3% in 2023 and then grow by 1% next year. The IMF’s latest prediction represents a small upgrade, from a previous forecast of a 0.6% contraction. Chancellor Jeremy Hunt said: “Our IMF growth forecasts have been upgraded by more than any other G7 country,” adding: “The IMF now say we are on the right track for economic growth. By sticking to the plan we will more than halve inflation this year, easing the pressure on everyone.” The IMF expects global growth to fall from 3.4% in 2022 to 2.8% in 2023, before rising slowly and hitting 3% in five years’ time. Germany is the only other G7 country forecast to suffer a contraction this year, at 0.1%.
Companies entering administration hits three-year high
The number of companies entering administration hit 130 in March, the highest figure since the outbreak of the pandemic. Figures from advisory firm Kroll show that a rise in administrations continued in March, hitting the highest level since March 2020, when lockdowns made trading impossible for many firms. The number of companies entering administration in the first quarter of 2023 hit 288, marking a 34% year-on-year increase. Kroll managing director for restructuring Sarah Rayment said: “While initially concerning, administrations breaking through the pre-pandemic average should not come as a surprise,” adding: “We know that the rise in energy price and conclusion of pandemic business support is putting pressure on businesses.”
EU bankruptcies set to exceed UK total
Analysis from Allianz Trade shows that EU-wide bankruptcies this year are set to be far higher than the UK as a proportion of pre-pandemic levels. There will be 23% more bankruptcies in 2023 compared with 2019 across the eurozone, compared with a 16% rise in Britain. Twice as many French companies will go bust as British ones over the next two years, according to the forecast. The report suggests that 59,000 companies are projected to fall into insolvency in France this year, followed by 57,000 in 2024. In the UK, the figures are set to hit 28,500 this year and 31,000 in 2024.
Workers returning to jobs market
The number of workers looking for new jobs rose for the first time since February 2021 in March, according to a survey of recruiters by the Recruitment and Employment Confederation (REC) and KPMG. While the report noted “improved confidence” among employees, it also said the number of candidates seeking jobs has also been boosted by a rise in firms making redundancies. While growth in temporary hires hit its highest level in six months, the number of people taking permanent roles continued to fall. REC chief executive Neil Carberry said: “The big news is that candidate availability is up for the first time in more than two years. This suggests that, while the market is still tight, it should be getting gradually easier for firms to hire over the next few months.” Claire Warnes of KPMG commented: “While the labour market continues to show resilience, it is nowhere near the pre-pandemic levels of stability.”
Hunt urged to cut taxes
Following reports that Jeremy Hunt is planning tax cuts in the autumn Budget, a number of Conservatives have urged the Chancellor to make reductions as soon as possible. Sir John Redwood said: “We need tax cuts now, the sooner the better. There is a big real income squeeze underway,” adding a call for tax cuts on business investment as the increased rate of corporation tax rate “is doing great damage to future investment plans and hitting new jobs.” Meanwhile, MP David Jones said: “The most important thing to do is reduce the level of corporation tax so we encourage more companies to establish themselves in this country.” The TaxPayers’ Alliance also welcomed the possibility of reductions, saying a cut to income tax would be “a light at the end of the tunnel” for people facing pressure amid the cost-of-living crisis. Prime Minister Rishi Sunak and Mr Hunt are said to be drawing up plans to cut income tax and raise the national living wage before the next general election.
Millionaires call for wealth tax
Some of Britain’s wealthiest people are asking the Government to increase the amount of tax they pay. Patriotic Millionaires UK, a group of millionaires who believe the rich must pay more tax in order to tackle wealth inequality, are calling for MPs to impose a wealth tax on those with over £10m in net assets. The group published a policy briefing document ahead of Chancellor Jeremy Hunt’s Budget, outlining wealth tax policies designed to boost economic growth. They estimate that their flagship policy, a 1% to 2% wealth tax on those with assets over £10m, would raise up to £22bn a year. They also believe in equalising capital gains rates with income tax rates. An increase to capital gains tax rates would see higher earners pay 40% on the gains made from selling shares and property, compared to the current rates of 20% and 28% respectively.
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 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.