Business news 12 December 2024
Business leaders warn Reeves about the impact of her Budget tax rises. Business rates reform will lead to ‘carnage’. House prices, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Business leaders warn Reeves about the impact of her Budget tax rises
A meeting between senior corporate leaders and Rachel Reeves on Wednesday saw the Chancellor warned that companies are facing major uncertainty due to her tax-raising Budget. The executives used a roundtable organised by the British Chambers of Commerce to warn that the economic backdrop was extremely challenging. Speaking after the meeting, Martha Lane Fox, president of the BCC and chairman of the Business Council, said: “There’s no hiding the reality that the Budget was tough for business. Millions of firms are now facing a raft of increased costs in the coming months. Higher bills will impact investment and recruitment. Our latest forecast also suggests the ripples will be felt across the wider economy.”
Business rates reform will lead to ‘carnage’
John Webber, the head of business rates at Colliers, says in a piece for City AM that the Government is failing to appreciate the knock-on effect of business rates reforms. He explains that reducing the current 75% discount on business rates bills to 40% for the retail and hospitality sector will result in those businesses currently eligible for relief seeing their business rates bills rise by 140% next year. On top of this draft legislation proposes introducing a higher multiplier on businesses occupying more expensive properties. This would be devastating for the office sector, larger bricks-and-mortar high street retailers and hotels. “And given we are also facing a revaluation in 2026 expected to result in increases in rateable values across the sectors, this together with the higher multiplier, will lead to carnage.”
Energy
Energy firms will be forced to offer customers tariffs with no standing charges, under a proposed shake-up of bills by regulator Ofgem. Standing charges cover the costs of connecting to a supply, but there have been widespread calls for these fees to be scrapped. Ofgem is proposing suppliers offer one price-capped tariff that includes the standing charge, and another that loads these costs on energy usage charges instead. Customers could choose which suits them best.
House Prices
UK House Prices will register an increase next year, property portal Rightmove predicted, with London set for a bumper year of growth too amid a boost from rate cuts. Rightmove said 2025 is set to be a “buyers market” as the firm revealed five housing market predictions for next year. According to the property portal, national average asking prices will rise by 4% in 2025 – the firm’s largest price growth prediction since 2021 – with around 1.15 million transactions expected.
Markets
This morning on currencies, the pound is currently worth $1.2758 and €1.2138. On Commodities, Oil (Brent) is at $73.73 & Gold is at $2717. On the stock markets, overnight in the US the S&P 500 rose 0.82% to 6084.19 and the NASDAQ rose 1.77% to 20034.89 (the first time it has closed above 20k as the share prices of Alphabet, Meta and Tesla closed at record highs. ) after a benign US inflation report cemented expectations that the Fed will cut rates next week (CPA was up 0.3% month on month – 3.3% year on year in line with estimates). The FTSE 100 is currently up 0.2% at 8317.72 and the Eurostoxx 50 is up 0.04% at 4961.11.
The ECB is set to lower rates for the fourth time this year, by 25 bps, according to a Bloomberg poll. Bloomberg Economics said the easing cycle will end in 2025 when the deposit rate reaches 2%, with cuts at every meeting at least through March.
Lloyds Banking shares headed higher on Wednesday on news the Supreme Court would hear an appeal against October’s ruling over motor finance mis-selling. Lloyds, which is among those exposed to potential compensation, gained, while peer Close Brothers also jumped.
Civil Service cuts
The UK government plans to slash more than 10,000 civil service jobs amid a cost-cutting drive. Chancellor Rachel Reeves has vowed to tackle “wasteful spending” and find savings of up to 5% within departments. The civil service currently has 513,000 employees and grew by 5% last year.
Meanwhile various trade unions criticized the UK government over public sector pay proposals for next year, raising the prospect of potential industrial action and tensions that would be a blow to Keir Starmer’s administration. The Royal College of Nursing, Unison and the Public and Commercial Services Union all condemned the government after it suggested a 2.8% pay rise for staff in the National Health Service for 2025-26, only marginally above the 2.6% inflation rate forecast by the Office for Budget Responsibility for that period. “This is deeply offensive to nursing staff, detrimental to their patients and contradictory to hopes of rebuilding the NHS,” RCN General Secretary Nicola Ranger said in a statement.
NICs hike brings Christmas bonus woes
The Chancellor’s decision to increase the National Insurance burden for companies has led many employers to cut Christmas bonuses for staff, the Telegraph reports. According to a study carried out by Robert Walters, of the workers who typically receive an end-of-year bonus, 45% will receive nothing in December or January, according to a survey of 500 employers, a jump from 32% in 2023, and 30% the year before. A third of employers attributed bonus cuts to reduced profit margins, while a quarter cited economic uncertainty and inflation. Robert Salter, director at tax firm Blick Rothenberg, said: “Some firms haven’t changed anything yet, as the rises haven’t kicked in yet – and they want to reward workers who have had a good year. But some companies have struggled anyway, and […] are cutting bonuses, because if they get it wrong, they may have to make redundancies – and they would much rather cut bonuses where they can.”
Some NHS workers move abroad to avoid 70% tax
The Daily Telegraph reports on the NHS workers leaving the country due to sky high taxes. Doctors who earn between £200,000 and £242,500 are taking home less pay despite doing more hours of work because their pension’s annual allowance begins to decrease by £1 for every £2 they earn above the £200k threshold. An NHS anaesthetist and critical care specialist told the paper: “Every year, as I approach the annual threshold for pension tax, I stop doing overtime for the NHS. If I go over that threshold, I start losing my annual tax-free pension allowance and end up paying about a 70% nominal tax rate.” They added: “I’m currently looking at taking a year abroad – partly to minimise my pension tax liability. My job will have to be backfilled by a locum at potential cost to the NHS.”
CMA investigates bid rigging in construction
The UK Competition and Markets Authority (CMA) has initiated an investigation into several roofing and construction companies suspected of colluding to rig bids for contracts funded by the Government’s Condition Improvement Fund (CIF). Juliette Enser, the CMA’s executive director of competition enforcement, said: “While no assumptions should be made that competition law has been broken at this early stage, we will be investigating this issue thoroughly.” The investigation follows surprise inspections at various business premises to collect evidence. The CIF allocates significant funds, with nearly £450m available in the latest round, aimed at improving school facilities. If the CMA finds evidence of wrongdoing, it may issue a “statement of objections” and impose penalties, including potential bans on future public contracts.
Immersive gaming firm enters administration
Immersive Group Gaming has appointed administrators from Begbies Traynor to run the business as a going concern while seeking a buyer. The company, which trades as Immersive Gamebox, was founded in 2018 and now has eight international studio content partners
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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.