Business news 15 December 2023

James Salmon, Operations Director.

Small businesses hit by cost-of-living crisis and taxes. SMEs use personal credit cards for funding. Bank of England holds interest rates at 5.25%.  And more business news that we thought would interest our members.

Small businesses hit by cost-of-living crisis and taxes

Three in 10 small business owners (29%) have cited the cost-of-living crisis as the biggest challenge they have faced this year – followed by tax hikes (21%), and rising business rates (19%), according to a survey by Virgin StartUp. Despite concerns over these issues, two-thirds of business owners believe their company will be in a stronger financial position in six months, with 95% planning to make at least one new hire in the next year. It was also found that four in 10 have used personal savings to help grow their business this year. To support their businesses, founders say they need more access to start-up loans, increased investment, and corporation tax cuts. Additionally, 31% said access to venture capital and investors was lacking for underrepresented entrepreneurs – including female, black, minority ethnic, and disabled founders.

SMEs use personal credit cards for funding

Research from Shawbrook shows that almost half of SMEs are currently using a personal credit card to fund their business. Shawbrook’s survey found that two in five business owners are currently using a personal loan and 46% have had to dip into their personal savings. The study shows that 45% of SMEs surveyed that turn over between £25m-£49.99m a year are using a personal credit card, as are 47% of those with a turnover of £50m-99.9m. Neil Rudge, head of enterprise at Shawbrook, said: “It’s concerning if some of the more established SME owners are relying on their own money simply because they’ve found limited access to funding from traditional providers.”

Bank of England holds interest rates at 5.25%

The Bank of England’s Monetary Policy Committee (MPC) has left interest rates unchanged at 5.25% for the third consecutive time. While six members of the MPC opted to keep rates unchanged, three voted to raise rates to 5.5%. The committee said the decision whether to increase or to maintain the Bank rate “was again finely balanced between the risks of not tightening policy enough when underlying inflationary pressures could prove more persistent, and the risks of tightening policy too much given the impact of policy that was still to come through.”

Meanwhile, Bank governor Andrew Bailey has warned there is “still some way to go” to reduce inflation, saying that, in his view, it is “really too early to start speculating about cutting interest rates.” “I don’t think that we can say definitively that interest rates have peaked. I hope that we are at the top of the cycle,” he added.

Martin Beck, the chief economic adviser to the EY Item Club, said the forecasting group expects four rate cuts in 2024, beginning in May. Suren Thiru, economics director at the ICAEW, commented: “The Bank’s rhetoric on rates is unnecessarily hawkish given slowing wage growth and a deteriorating economy, raising fears that it will keep rates high for too long, unnecessarily damaging an already struggling economy.”

It surprised analysts that The Bank of England pushed back on expectations of rate cuts as premature, indeed the MPC poured cold water on the PM’s earlier remarks.  And with three of the nine voting members calling for an increase to 5.5% it underlined ho different the BoE’s position was to other central bankers with the US moving towards cuts.

Sterling lifted to $1.2770 in response to the Bank’s tone.

The ECB echoed the BoE remarks, also keeping rates unchanged at 4.5% and saying the 2% target was only likely in 2025. Furthermore the ECB expects inflation to pick up over the next quarter.
Gilt prices continued to move ahead particularly in the 5 year maturity with yields declining 0.08% to 3.79%. Current market estimates envisage UK base rates declining by 1% over 2024.


US market futures climbed on Friday morning after Wall Street notched a fresh record, heading for its best weekly winning streak since 2019  after the Federal Reserve held rates and laid out a roadmap for cuts in 2024 and beyond.  Overnight, the DOW rose 0.43%, the S&P 500 rose 0.26% and the NASDAQ rose 0.19%.

Oil Prices rose, on track to notch their first weekly rise in two months after benefiting from a bullish forecast from the International Energy Agency on oil demand for next year and a weaker dollar.

Gold touched a 10 day high as the dollar slipped.

Consumer confidence

UK consumer confidence edged higher as households looked forward to lower inflation and a slightly improved economy in 2024. GfK Ltd. said its measure of sentiment rose 2 points to -22, the highest level since January 2022. However, the negative reading still indicates household confidence is not strong.  The increased optimism tracked across across measures including their financial situation, their economic outlook, and view of major purchases.

Half of staff seek a four-day week

Analysis by jobs platform Flexa has found that 48% of workers prefer a four-day week, marking a slight decline from the 50% recorded in April. The research also found that 37% of employees want to work part-time, down from 50% in April’s study. The Flexible Working Index, which took into account 2.8m job searches, 9,300 job adverts and more than 27,000 job-seekers’ preferences, shows that demand for ‘work from anywhere’ roles – where workers can travel and still carry out their role – increased by 583%. Flexa’s survey also found that a third of employees want jobs that offer mental health support. Molly Johnson-Jones, chief executive and co-founder of Flexa, said: “Four-day weeks increase work-life balance and overall wellbeing for all employees, and also offer workers who would usually seek part-time roles a better-paid alternative.”

Workers unaware of flexible work rights

A poll by the Advisory, Conciliation and Arbitration Service (Acas) shows that 70% of employees are unaware that, as of April, they will have a right to request flexible working from their employer from day one of their job. Currently, staff who have worked for their employer for 26 weeks or more have the right to ask if they can work flexibly. Business and Trade Minister Kevin Hollinrake said the change makes “good business sense,” and will help firms to “attract more talent, increase retention and improve workforce diversity.” Acas, it is noted, has consulted on a new draft code of practice, which chief executive Susan Clews says “strengthens good practice on flexible working and addresses important upcoming changes to the law.”

Currys boss criticises ‘ill-advised’ tax increase

Alex Baldock, chief executive of electricals retailer Currys, has called on the Government to reconsider its “ill-advised” inflation-linked increase to commercial property taxes. Mr Baldock warned that the simultaneous increase in the minimum wage and commercial property taxes will lead to sustained inflation and hinder investment, growth, and job creation in several key sectors. While he acknowledged that it is too late to change the national minimum wage, he urged the Government to reconsider the tax rates. The increase will primarily affect retailers, restaurants, and pubs in expensive high street locations. The British Retail Consortium (BRC) and UKHospitality have also called for the Government to reverse its decision. Helen Dickinson, CEO of the BRC, has criticised the Chancellor’s failure to commit to a business rates freeze, which will result in additional costs for businesses. The Treasury said it has taken a third of properties out of paying business rates altogether “whilst protecting bills for over 1m business properties from inflation and cutting taxes on investment.”

BoE: Tax-cutting measures will have minimal impact on economy

The Bank of England has warned that Chancellor Jeremy Hunt’s tax-cutting measures will have minimal impact on the economy. Mr Hunt’s Autumn Statement saw National insurance cut by 2% and the Chancellor also permanently extended full expensing, a scheme allowing companies to offset investment in machinery and equipment against their tax bills. In a report, the central bank said that the measures could boost national output by just 0.25% over the coming years. The Bank’s forecast aligns with the revised down forecasts for economic growth by the Office for Budget Responsibility.

Amazon wins European court clash over €250m tax bill

Amazon has won a €250m tax dispute against the European Union. The EU’s Court of Justice dismissed the European Commission’s appeal, stating that the tax arrangement between Amazon and Luxembourg was not a state aid that violated the internal market. The ruling is a setback for EU Competition Chief Margrethe Vestager, who has been fighting against special tax treatment for large companies

HMRC defends chasing taxpayers for small sums

HMRC chief executive Jim Harra has defended paying debt collectors to chase taxpayers for small sums. He told the Public Accounts Committee that the tax office will continue to chase small sums, using both internal and external debt collectors to do so, citing recent improvements in its return on debt collection, saying: “We take a risk-based approach to debt management. Even small debts, if it is cost-effective, we will pursue them.”

HMRC accused of making it too hard to challenge rulings

MPs have voiced concern over the unfair treatment of taxpayers who tried to challenge HMRC on its interpretation of self-employment rules. Appearing before the Public Accounts Committee, HMRC chief executive Jim Harra heard claims that the tax office makes it difficult and expensive for people who regarded themselves as self-employed to challenge adverse tax rulings. Mr Harra said that some of the employment status cases that had gone to court were “very important” because they helped to clarify the rules, adding that it is “important we have the right level of representation.” Reflecting on IR35 reforms which have pushed freelancers to categorise themselves as employees, usually with adverse tax consequences, Mr Harra said the reforms had pushed up to 150,000 people from using personal service companies into employment status and boosted tax revenues by £1.8bn between October 2019 and March 2022.


China reported its industrial output expanded at the fastest pace since February 2022 in November, though retail sales growth missed expectations, pointing to a patchy recovery in the world’s second-largest economy. China’s industrial output grew 6.6% in November from a year earlier. This outpaced expectations for 5.6% in a Reuters poll and follows a 4.6% rise in October. Retail sales climbed 10.1% in November from a year ago, the fastest pace of growth since May — though analysts had expected a 12.5% spike following a low base in 2022. Retail sales rose 7.6% in October.

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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 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!

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 – 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.