Business news 16 September 2024
Calls for more positivity from Labour. SME’s forced to bend the rules. Workers rights reforms, Manufacturing, vacancies, pensions, renters rights, inflation, savings, WFH, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Iceland boss calls for more positivity from Labour
Richard Walker, executive chairman of Iceland, shifted his political allegiance from the Tories to Labour earlier this year, citing the latter as “the right choice for the communities across the country where Iceland operates.” However, he has now expressed concerns about potential business tax increases in the upcoming Budget, warning that UK PLC is “not a lemon that can keep being squeezed without any adverse impact on employment or consumers.” Walker stressed the need for a positive Budget that could stimulate economic growth through long-term investments.
SMEs forced to ‘bend the rules’ to reduce their tax liability
Recent findings reveal that 41% of businesses with 150 to 249 employees are bending tax rules, often claiming personal expenses as business-related. Tim Halford, Chief Commercial Officer at Xeinadin, stated: “Our survey highlights a concerning trend where a majority of SMEs are using loopholes.” The cost-of-living crisis has exacerbated this issue, with 49% of businesses citing financial pressure as a reason for exploiting loopholes. Many business owners say they are forced to find alternative ways to save money due to over-taxation and lack of government support. While some practices are illegal, others, such as using dividend distributions, are legal methods employed to reduce tax bills.
Reeves: ‘Tough’ decisions on tax and spending are vital
Chancellor Rachel Reeves says “tough” tax rises and public service cuts are vital if Britain is to rival Germany and the US, saying they would help to bring stability back to the economy and boost productivity. This comes as Britain faces a productivity gap, with data showing that GDP per capita in the UK is now £8,000 lower compared with Germany and £9,000 compared with the US. Ms Reeves said: “Growing the economy is this Government’s number one priority for a reason: it’s about more pounds in people’s pockets, public services that are properly funded and business that can thrive.” While Labour says it inherited a £22bn black hole of unfunded spending commitments, the Tories insist that this is not the case and that Labour had always planned on tax increases and spending cuts.
CBI: Rights reforms will make UK less attractive
According to the CBI/Pertemps Employment Trends Survey, the UK may become less appealing for business due to Labour’s proposed workers’ rights reforms. The survey revealed that 62% of respondents believe Britain will be a less attractive destination for investment over the next five years, with 36% indicating it will be “much less” appealing. Matthew Percival, the CBI’s skills director, expressed concerns about the lack of detail in the reforms, stating: “Businesses are concerned that achieving these goals in the wrong way risks significant unintended consequences for growth and for workers.” While nearly half of the firms surveyed expect growth in the next year, there is a pressing need for the Government to collaborate with businesses to ensure the reforms do not hinder investment and job creation, he added.
Labour struggles to agree on detail of rights reforms
The Business Secretary and the Deputy Prime Minister are reportedly at odds over plans to hand workers full employment rights from day one in a job. The Telegraph has been told that Jonathan Reynolds and Angela Rayner were in disagreement over how far reforms should go. Ms Rayner is understood to be pushing to hand staff full-employment rights from day one following a short probation period but Reynolds is said to prefer the idea of shortening the qualification period for full employment rights but still requiring a probation period of almost a year. “Day one rights is proving very difficult,” a Whitehall source said. “Angela is less keen on a longer probation period, Reynolds thinks nine months is reasonable. It’s unclear if an agreement will be reached.” Meanwhile, the FT reports on how experts are warning that if loopholes in worker status rules aren’t closed, Labour’s new protections will only incentivise businesses to take people on as self-employed contractors, temps or agency workers rather than as employees.
Manufacturers optimistic about 2024 growth
Research by Make UK and BDO reveals that three in five manufacturers anticipate improved economic growth in 2024, with only 6% of over 300 surveyed companies expecting a decline. Make UK has revised its growth forecast for 2025 from 0.8% to 1.8%. Fhaheen Khan, a senior economist at Make UK, stated: “This quarter presents a tale of two halves, with output turning negative and recruitment taking a dip, yet investment remains positive and business confidence continues to climb.” Richard Austin, the head of manufacturing at BDO, added: “Manufacturers are hopeful that a period of greater political stability will provide a better economic outlook ahead, and that in turn is boosting business confidence.”
Job vacancies drop as economy slows
Job vacancies in the UK decreased by 3.2% in August, totalling nearly 720,000, as reported by the Recruitment and Employment Confederation (REC). This decline coincides with a contraction in factory output, marking the first decrease in four years. Make UK indicated that the balance of output fell from 9% to -2%, suggesting manufacturers are hesitant to hire. These trends may influence the Bank of England’s Monetary Policy Committee, which recently cut the base rate from 5.25% to 5%. Governor Andrew Bailey cautioned against rapid rate cuts, stating the need to ensure inflation continues to decline. Investors anticipate that rates will remain unchanged in the upcoming meeting.
Chancellor urged to mandate higher pension contributions
The Institute for Fiscal Studies (IFS) has recommended that older middle-class workers be mandated to increase their pension contributions to avert a retirement crisis. IFS research indicates that between 5m and 7m private sector workers are at risk of inadequate retirement income, but suggests that only higher earners and those over 50 should be mandated to save more, as lower earners may struggle with reduced take-home pay. The IFS suggests that the Government should extend auto-enrolment to ages 16-75 and require employers to contribute 3% of total pay to pensions, even for those who opt out.
Renters’ Rights Bill drives landlords to sell
The introduction of the Renters’ Rights Bill has prompted many landlords to reconsider their investments in the rental market. The new legislation will make it harder to evict tenants, extending the rent arrears threshold from two to three months and banning “no-fault” evictions. Experts warn that these reforms could lead to a significant reduction in rental stock, potentially driving up rents by as much as 10%. Jessica Parry from Bryan Cave Leighton Paisner said: “The scrapping of the Section 21 eviction route, introduction of a landlord database, and risks of hefty fines, will be too much of a burden for many to bear.” As landlords exit the market, concerns grow over the impact on tenants, particularly those on benefits, amid a backdrop of rising rents and limited housing supply.
Markets
On Friday, London markets were positive as the trading week drew to a close, with the mining sector tracking the strength in gold (it hit $2600) amid declines in the US dollar. The FTSE 100 closed up 0.39% at 8273.09 and the Euro Stoxx 50 closed up 0.62% at 4844. While over in the US the S&P 500 rose 0.54% to 5626.02 and the NASDAQ rose 0.65% to 17683.98.
This morning on currencies, the pound is currently worth $1.32 and €1.186. On Commodities, Oil (Brent) is at $72.1 & Gold is at $2577. On the stock markets, the FTSE 100 is currently down 0.1% at 8264 and the Eurostoxx 50 is flat at 4842.
Markets are likely to be in a holding pattern waiting a crucial meeting from the US FED later this week and their decision on US rates. Will the cut be 0.25% or 0.5%?
Inflation expectations fall to 3-year low
Public expectations for inflation over the coming year fell to a three-year-low in August, according to a Bank of England survey. The quarterly survey saw inflation expectations for the coming 12 months fall to 2.7% in August, with this down from 2.8% in May and marking the lowest rate since August 2021. Expectations for the following 12 months were unchanged at 2.6%, while expectations for five years ahead rose to a nine-month high of 3.2%, up from 3.1% in May.
Britons have at least £430bn in excess savings
British savers hold approximately £430bn in excess cash, according to Barclays. The report suggests that 13m people could benefit from investing their savings, going on to call for regulatory changes to facilitate this.
Ending tax relief on shares puts growth at risk
Experts warn that abolishing the inheritance tax exemption on shares in high-growth businesses could jeopardise the UK Government’s economic growth objectives. The Institute for Fiscal Studies estimates that scrapping this relief could generate £1.1bn for the Treasury, but it may stifle innovation and productivity. Since 1996, shares in small and medium-sized companies listed on Aim have been exempt from inheritance tax if held for over two years before death. Nicholas Hyett, an investment manager at Wealth Club, stated: “The UK already has a problem with losing its best and most ambitious businesses overseas. This would only make things worse.” The speculation surrounding the Chancellor’s potential decision has already impacted Aim-listed shares, which have fallen by about 4% since Labour took office.
House Prices
UK House Prices rose in September with the traditional autumn rebound in activity starting early, a report showed. According to Rightmove’s House Price Index, average new seller asking prices rose by 0.8% in September to £370,759. September usually sees a monthly rise in prices, but this year’s increase is double the long-term average, with prices supported by increased activity levels, the online property portal stated.
UK spending cuts would damage ‘foundations of the economy’, Reeves told
Eight senior economists have written to the FT warning that the very foundations of the economy would be damaged should public investment in the UK is reduced.
Eurozone
Eurozone Industrial Production fell by 0.3% in July, according to data released on Friday, a decrease that was smaller than anticipated. The decline follows a period of stagnation in June, as reported by Eurostat. The data reveals a varied performance across different sectors. Production of durable consumer goods dropped by 2.8%, capital goods fell by 1.6%, and intermediate goods decreased by 1.3%. Conversely, energy production increased by 0.3%, and non-durable consumer goods saw a rise of 1.8%.
TI Fluid Systems
TI Fluid Systems rejected a takeover approach from automotive components maker ABC Technologies. Noting “recent press speculation”, ABC, which makes plastics and lightweighting products for the automotive industry, said two takeover tilts were rejected by TI Fluid.
Italy retains allure for rich Europeans fleeing higher taxes
Despite the recent decision by Italy to double its flat tax on the foreign income of rich expats to €200,000 a year, advisers say wealthy Europeans still want to relocate to the country.
Foreign investors own 16% of UK’s national debt
Analysis by the Mail on Sunday shows that foreign governments own far more of the national debt than previously thought. Office for Budget Responsibility (OBR) data shows that foreign investors own 28% of UK national debt – nearly twice the percentage of two decades ago – and most of it was thought to be held by private investors. However, OBR chairman Richard Hughes has revealed that foreign governments own about £430bn of Britain’s £2.7trn debt pile. Mr Hughes, in a House of Lords Economics Affairs Committee report, said these investors hold 16% of all Government debt, not the 2.9% previously thought, with the data from the International Monetary Fund detailing exactly who owned the debt. Mr Hughes warned that “fickle and flighty” foreign buyers of UK Government debt lacked “home bias,” were susceptible “to geopolitical considerations in their portfolios,” and posed a “growing risk to the stability of the gilt market.” Mohamed El-Erian, chief economic adviser at insurer Allianz, says foreign holders of debt are like tourists, saying: “The minute something goes wrong they head to the airport and get out.” He added: “That is what tends to happen during shocks.”
Development hindered by generational divide on WFH
The Sunday Times looked at a generational divide in office attendance, saying that it raises questions about the future of remote work and its impact on professional development. While the number of workers returning to the office is increasing, middle-aged employees have been the most reluctant to return. Figures from the Centre for Cities think-tank show that 18 to 24-year-olds in London spend an average of 3.1 days a week in the office, compared with 2.5 days for 35 to 44-year-olds and 2.7 days for those over 55.
Meanwhile, a survey of 10,658 workers by recruitment agency Hays has found that 45% of 20 to 29-year-olds are fully in the office, compared with 38% of those in their forties. It is noted that several large firms are pulling remote workers back into the office, with PwC requesting that its 26,000 UK staff return to the office at least three days a week.
Laura Hinton, the UK managing partner of PwC, said: “So much of what we do depends on learning and development, not just professional qualifications but on-the-job learning from others,” adding: “This is almost always best done face-to-face and requires people at all levels of seniority spending time together.”
Justine Campbell, EY’s managing partner for talent in the UK and Ireland, agrees that excessive home working could affect training, saying: “We aim to strike a balance between the needs of our clients, the benefits of in-person collaboration and the personal flexibility our people need.”
Two-thirds of employees are stressed by work
According to new research by Ciphr, work is the third largest source of stress for UK employees, following lack of sleep and financial worries. The survey of 1,238 employed adults revealed that more than two-thirds (70%) identified work-related stress factors, with 37% citing work in general as a major contributor. Other significant stressors include workload pressures (35%), long or inflexible hours (23%), and concerns about job security (17%). Two in five (42%) of all employees below senior management level find work in general stressful, while just one in four (25%) senior managers and leaders say the same. The findings indicate that stress levels vary across industries, with hospitality and events workers experiencing the highest stress, averaging 15.6 days a month where they experience stress.
Claire Williams, chief people and operations officer at Ciphr, said: “Employers need to be mindful of the role they can play in helping to relieve an individual’s stress and anxiety,” adding: “Unrealistic workloads and time pressures, overbearing bosses, unsupportive colleagues, and toxic workplace cultures, can all trigger stress.”
Harland & Wolff prepares to call in administrators
Shipyard Harland & Wolff has launched a forensic investigation into £25m of “misapplied” spending, with PwC and legal experts from Simmons & Simmons hired to conduct an internal review over the spending of customer deposits. This comes as the ship maker reportedly prepares to call in administrators. Teneo has been lined up to oversee the bankruptcy of Harland & Wolff, with sources saying Spanish firm Navantia the frontrunner to take control in an auction overseen by investment bank Rothschild.
Latest Insolvencies
Appointment of Administrator – HADDEN CONSTRUCTION LIMITED
Petitions to wind up (Companies) – GATHERCOLE RACE ENGINES LIMITED
Petitions to wind up (Companies) – ABSOLUTELY HR LTD
Petitions to wind up (Companies) – MIDLOTHIAN UTILITIES LIMITED
Appointment of Liquidators – COMPRAR LIMITED
Appointment of Liquidators – HAMMICK AND HAMMICK LIMITED
Appointment of Liquidators – GPC SURVEYORS LIMITED
Appointment of Administrator – TRIRX SPEKE LTD
Petitions to wind up (Companies) – MCCOLL’S GROUP LIMITED
Petitions to wind up (Companies) – MOSS ARCHITECTURE LIMITED
Appointment of Liquidators – KINGSACRE DEVELOPMENTS LIMITED
Appointment of Liquidators – SJHARE LIMITED
Appointment of Liquidators – A C ROBERTS LIMITED
Petitions to wind up (Companies) – ACTIVE NEURO LIMITED
Petitions to wind up (Companies) – DARK MATTER DISTILLERS LIMITED
Appointment of Liquidators – MOT INN LIMITED
Appointment of Liquidators – SUZANNE MB LIMITED
Petitions to wind up (Companies) – THE OFFICE PLACE (YORKSHIRE) LTD
Appointment of Liquidators – ANCHORAGE FINANCIAL SERVICES LIMITED
Appointment of Liquidators – ARCHES PHYSIOTHERAPY LIMITED
Appointment of Liquidators – KNIGHTSBURY CONSTRUCTION LIMITED
Appointment of Liquidators – HMS MANAGEMENT LIMITED
Appointment of Liquidators – PUG PIT LIMITED
Appointment of Liquidators – TYRONE ACCOUNTANCY SERVICES LIMITED
Petitions to wind up (Companies) – NEW BEGINNINGS HOUSING COMMUNITY INTEREST COMPANY
Appointment of Liquidators – VESPULA LTD
Petitions to wind up (Companies) – MOFFETT LIVESTOCK LIMITED
Petitions to wind up (Companies) – SPICE CUBE SCOTLAND LIMITED
Petitions to wind up (Companies) – TAYLOR BUILD (SCOTLAND) LIMITED
Petitions to wind up (Companies) – AEE ELECTRICAL LTD
Petitions to wind up (Companies) – NEW WORLD TAVERNS LTD
Appointment of Liquidators – DIGITAL SUNRISE LIMITED
Petitions to wind up (Companies) – DOMUS JOINERY WORK & BUILDING LTD
Appointment of Liquidators – GRAHAM STEEL ERECTORS LIMITED
Appointment of Liquidators – D BLAKEY & SONS LTD
Appointment of Liquidators – SMH SYSTEMS LIMITED
Petitions to wind up (Companies) – MUNSELL SPORTS LIMITED
Petitions to wind up (Companies) – SEQUELGATE TECHNOLOGY SOLUTIONS LTD
Appointment of Liquidators – SUNDIAL OPTIONS AND SOLUTIONS LIMITED
Appointment of Liquidators – SUNDIAL GROUP LIMITED
Appointment of Liquidators – OWEN WHITE LIMITED
Appointment of Liquidators – C&G BIRCHANGER LIMITED
Appointment of Liquidators – BANKS FARM PROPERTY LIMITED
Appointment of Liquidators – CITY ELECTRICAL INSPECTIONS LIMITED
Appointment of Liquidators – AUXILIUMSEC LIMITED
Appointment of Liquidators – ODL CONSULTING GROUP LIMITED
Appointment of Liquidators – E-CARAT 11 PLC
Appointment of Administrator – R&Q UK HOLDINGS LIMITED
Appointment of Liquidators – ZHRC LIMITED
Appointment of Liquidators – ANDREWS WASTE MANAGEMENT LIMITED
Appointment of Administrator – VK RECYCLING LIMITED
Appointment of Administrator – PRESTON EV LIMITED
Appointment of Liquidators – C COWE CONSULTING LTD
Petitions to wind up (Companies) – LP LOGISTICAL TRANSPORT SERVICES LTD
Appointment of Liquidators – FEIRN CONSULTANCY LTD
Appointment of Liquidators – REICOL LIMITED
Appointment of Liquidators – STRANDVIEW LIMITED
Appointment of Administrator – CASA EL PASTOR LIMITED
Appointment of Liquidators – ABBEN INVESTMENTS LIMITED
Appointment of Liquidators – STEVE FEAST LTD
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.