Business news 17 May 2022

James Salmon, Operations Director.

Lending to small businesses sliding but they remain resilient.UK manufacturers reshoring supply chains. The latest employment news on WFH, sick pay and pay rises. All the latest fallout on inflation. VAT revenues at an all time high. The latest on property prices  And more business news.

Lending to small businesses sliding – where can you get cashflow?
A poll of 1,211 small business owners and sole traders by the Federation of Small Businesses (FSB) shows that lending to small firms in Britain has fallen to its lowest level since at least 2014. The data shows that just 9% of small firms sought finance in the first three months of this year, with the proportion that saw their applications approved hitting a record low of 43%. FSB National Chair Martin McTague said: “Lenders pulling up the drawbridge for small firms will threaten our already faltering economic recovery.”

With lending to small businesses sliding,  it is vital that SME’s maximise other ways to improve their cashflow. Took to CPA about how we can speed up payments from your customers and prevent bad debts, boosting your cashflow. Also, if you sell B2B, ask how we can get you late payment compensation from your former customers who paid you late in the last 6 years.

Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email today.

Sage says small businesses remain resilient
Software company Sage reported on Friday an 8% rise in organic recurring revenue in the six months to end-March. Chief Executive Steve Hare said SMBs remained confident about their prospects despite the gloomy economic backdrop. “They feel they’ve become a lot more adaptable and resilient over the last couple of years,” he said.

UK manufacturers reshoring supply chains
Analysis by trade group Make UK shows British manufacturers are bringing back production to the UK, with three-quarters increasing their number of British suppliers in the past two years and half saying they would do so in future. The survey also found that more than a third of manufacturers had increased the total number of suppliers over the past two years. A quarter of companies now have between 50 and 100, while one in seven have more 200 on their books. Of the 132 manufacturers surveyed by Make UK, 93% blamed the pandemic for supply chain disruption, while 87% pointed to Brexit.

PM wants staff to return to offices
Boris Johnson has urged people to return to the office, saying working from home does not work. The Prime Minister says full workplaces will lift productivity and revive town and city centres. Arguing that staff are “more productive, more energetic, more full of ideas” when surrounded by colleagues, Mr Johnson said: “I believe in the workplace environment.” In an interview with the Mail, he insisted: “We need to get back into the habit of getting into the office.” The PM commented: “My experience of working from home is you spend an awful lot of time making another cup of coffee and then, you know, getting up, walking very slowly to the fridge, hacking off a small piece of cheese, then walking very slowly back to your laptop and then forgetting what it was you’re doing.”

British workers lead the world on WFH demands
The UK has topped a table of nations where workers would rather quit or find a new job than return to the office five days a week. A global survey of 33,000 people by WFH Research saw 23% of British workers say they would rather leave their role or start looking for new job rather than go back to the office. The poll also shows that British workers want to work around two days a week at home, on average. This is roughly in line with the average number of days those surveyed currently work at home – around 1.93 days. Meanwhile, separate analysis by LinkedIn shows that women are leading the way on seeking flexible working, with 52% saying they have left or have considered leaving their jobs over a lack of flexibility. The poll saw 23% of women say they are more likely to leave their role since their employers started enforcing back to office policies, while 37% said they felt like progress made on flexible working during the pandemic is being lost. Of those whose workplaces have not gone fully remote, 39% of respondents said that they are now expected in the office four or five days per week. A quarter noted that their employer has put set office days in place.

London falls behind on office returns
Google data shows that London is behind other major capitals when it comes to staff returning to the office, post-pandemic. Analysis shows that footfall in London’s office hubs was down by an average 31.8% on pre-pandemic levels last week, putting it behind Paris, Berlin, New York and Tokyo for workplace attendance. In the City of London, activity was 33% lower than before Covid between May 9 and May 12, with a 35% fall in the City of Westminster. Footfall around offices in New York was down by 26.6%, while Paris recorded a 24.25% fall. In Berlin and Tokyo, footfall was down 17.5% and 16.6% respectively. Paul Swinney, Director of Policy at Centre for Cities, said: “My guess is the differences between these cities is to do with people’s lifestyles.” He added: “There’s a greater desire to live out-of-town from people who are highly paid and work in London. People who live outside of London are unsurprisingly doing fewer days than people who work within London.”

Employers reluctant to increase pay
A quarterly survey of 2,000 employers by the Chartered Institute of Personnel and Development (CIPD) shows that just 27% of companies across all sectors are willing to increase pay to retain or attract labour in Q2. This comes despite 45% saying they were struggling to fill vacancies and two thirds saying they expect hiring shortages to persist for the next six months. The poll suggests that the average pay increase in the second quarter will be 3%. While this is the highest level since the report began in 2013, it falls below average inflation of 9.1% in Q2, according to the Bank of England. With firms set to offer staff increased incentives rather than large pay rises, CIPD labour market economist Jonathan Boys said: “Employers are running out of steam on their ability to increase pay any further, so they’re switching their focus to retention and keeping their existing workforce happy.”

UK Wages suffered a sharp fall between January and March but the market for jobs remained buoyant. The Office for National Statistics said earnings, when adjusted for inflation, dropped by 1.2%. At the same time, however, the unemployment rate fell to its lowest level in nearly 50 years while job vacancies hit a fresh high.

Ministers urged to act over ‘broken’ sick pay system
Analysis shows that Britain has among the fewest working days lost to illness in the developed world. Sickness absence rose last year as the economy reopened, from a record low in 2020. However, despite rising from 3.6 to 4.6 days a year, the average number of days lost to sickness has been falling steadily – from seven a year in the mid-1990s. Almost 36m fewer working days were lost in 2021 compared with 1995, a decline of a fifth to 149.3m. A survey of 6,000 workers by the Chartered Institute of Personnel and Development (CIPD), the trade body for HR professionals, found that over the past three months, almost half of employees went to work despite not feeling well enough to fulfil their duties. The CIPD says fixing sick pay should be a top priority for workers and employers, with policy adviser Rachel Suff saying the absence figures “mask the true picture for the health of the working-age population.” Research by the TUC suggests that around 19% of the average UK salary is covered by sick pay. The £99.35 a week statutory sick pay (SSP) paid by employers for up to 28 weeks is one of the lowest rates in the OECD group of economies. Unions and business groups say SSP needs to be brought closer to the real living wage of £9.90 an hour and £11.05 in London – the equivalent of £361.35 and £403.33 for an average working week. Kate Bell, head of economics and rights at the TUC, comments: “It’s reckless and counterproductive for ministers not to have fixed our broken sick pay system.”

Cabinet ministers criticise BoE over inflation
Cabinet ministers have hit out at the Bank of England over rising inflation, reports the Sunday Telegraph, citing one who said the Bank has been failing to “get things right” and another who argues that it has failed a “big test.” In what the paper calls a “highly unusual attack”, one of the senior ministers said the Bank “has one job to do” – to keep inflation at around 2% – “and it’s hard to remember the last time it achieved its target.” The Telegraph says the interventions reflect growing frustration among Conservative MPs and ministers about the Bank’s approach to inflation, which currently sits at 7%. Lord Forsyth, a former Cabinet minister and the chairman of the Lords Economic Affairs Committee, said: “The first thing the Bank needs to do is acknowledge they made a mistake and say what they are going to do about it. One has the impression they are rather ostrich-like.” Liam Fox, the former defence secretary, last week said that the Bank had “underestimated the threat” of rising inflation.

Bailey defends BoE over inflation
Bank of England Governor Andrew Bailey has warned that the current surge in inflation represents “the biggest test of the monetary policy framework that we’ve had in 25 years,” telling the Commons Treasury Committee: “It’s a very, very difficult place for us to be in.” Asked by MPs if he felt “helpless” to do anything about inflation, Mr Bailey replied “yes,” saying: “To forecast 10% inflation and to say there is not a lot we can do about 80% of it, I can tell you it is an extremely difficult place to be.” Mr Bailey went on to refute criticism of the Bank’s handling of inflation. He denied the Bank had been “asleep at the wheel” on inflation and said much criticism had come with hindsight, saying there was no way economists could have foreseen the conflict in Ukraine and that monetary policy decisions are “based on the facts and evidence at the time.” Noting the impact of Covid cases in China and Russia’s invasion of Ukraine, he added: “We have seen a series of supply shocks coming one after another, and that’s unprecedented.” Mr Bailey also warned of an “apocalyptic” surge in food prices that could have a disastrous impact on the world’s poor. Reiterating a call for pay restraint, he also said: “I do think people, particularly people who are on higher earnings, should think and reflect on asking for high wage increases.”

Kwarteng: Inflation level clearly ‘an issue’
Business Secretary Kwasi Kwarteng says it is clearly “an issue” that the Bank of England is failing to meet its inflation target. He said that while Governor Andrew Bailey is doing a “reasonable job” in difficult circumstances, the 2% target was part of the Bank’s mandate “and they have to keep it to 2%.” He told Sky News’s Sophy Ridge on Sunday: “Inflation is running into almost double digits now. That is an issue, clearly,” before noting that these are “completely unprecedented times.” Mr Kwarteng also addressed the issue of inflation in an interview with the BBC’s Sunday Morning, saying it would be “very difficult” to get inflation back down to 2% but noting that “most countries in the world are running high single digit, some even double digit, inflation, but they (the Bank) have done a very good job.” He went on to add that Mr Bailey “is a very respected, very capable, central bank governor and he’s doing all he can to deal with this issue.”

CBI: Chancellor must deliver cost of living support
Tony Danker, director-general of the CBI, has urged Chancellor Rishi Sunak to step in and provide assistance to households being hardest hit by the cost of living crisis, saying it is “unacceptable” that people are having to choose whether to heat their homes or eat. Mr Danker said there is a need to help people facing real hardship, describing this as “the moral underpinning of our economy and society” and insisting: “Putting pounds in the pockets of people struggling the most should not be delayed.” He also called on ministers to “start stimulating business investment now,” arguing that “we will need to ensure that there is economic growth in the pipeline to avoid any downturn in our economy that could worsen or prolong the cost-of-living crisis.” Mr Danker added: “The Chancellor’s clear intention to use a forthcoming budget to cut taxes on business investment should become a firm commitment now.” However, he warned against “big injections to economic demand that might worsen inflation,” saying the focus should be on “getting the supply side of our economy moving.”

Inflation data set to show 40-year high
The Office for National Statistics (ONS) is this week expected to say that consumer price index inflation hit 9.1% in April, its highest level in more than 40 years. The ONS is also set to reveal that the rate of pay growth has stalled. Investec chief economist Philip Shaw said: “These figures will prove beyond any shadow of doubt there is a cost-of-living crisis.” Paul Dales, Capital Economics’ chief UK economist, comments that households “are feeling the pinch from sky-high inflation.” Martin Beck, chief economic adviser to the EY Item Club, said: “This week it is more bad news with prices rising and wages not keeping pace. The only good thing is unemployment is not expected to change.”

VAT revenues rise to highest amount ever
Research by UHY Hacker Young reveals HMRC collected a record £157.2bn from VAT bills in the last tax year, a 55% jump on the £101bn collected in 2020/21. The rise comes after businesses were forced to make up for VAT payments they deferred during the pandemic. Sean Glancy, a partner at the firm, explained that sharply rising inflation has also played a role in driving up the amount HMRC collects in VAT. “For all the good the VAT holiday did at the time it was introduced, it’s resulted in businesses paying the most VAT in recorded history the year after,” Glancy said. “The VAT holiday saved a lot of businesses in 2020 but it effectively just pushed the bills from one year into the next. Those increased payments in 2021 hurt for some of them.” Glancy concludes: “If inflation continues to run out of control the amount paid in VAT is only going to rise. Cutting VAT temporarily is one option the Government has to ease the cost of living crisis for individuals and businesses.”

WFH relief: People urged to check tax codes
The Guardian’s Rupert Jones reports that with millions of people back in the office for at least part of the week, it has become harder to claim tax relief for working from home, and most employees will no longer be eligible. Joanne Walker, a technical officer at the Low Incomes Tax Reform Group, says the rules were relaxed for 2020-21 and 2021-22 in favour of employees, but as of April, HMRC was following the rules fully again. HMRC has updated the guidance to make clear that you cannot claim the relief if there is an element of choice in your working from home. Robert Salter, a client tax director at Blick Rothenberg, recently said that employees should check their tax codes to see if HMRC has included the relief. “If this is the case, unless they are still eligible for the relief in 2022-23, they should contact HMRC to get the notice of coding corrected. Otherwise they will have additional tax to pay at the end of the tax year.”

Kwarteng to classify natural gas as ‘green’ investment
The Business Secretary is reportedly preparing to class natural gas extraction in the North Sea as a “green” investment as the Government looks to ramp up production. Kwasi Kwarteng is understood to be keen that drilling for the fossil fuel is listed as “environmentally sustainable” in a new classification of activities being drawn up by his department and the Treasury to guide investors. A Whitehall source said: “Kwasi considers natural gas a transition fuel… A lot of investors with ESG targets are divesting from fossil fuels – we don’t want that to be done at the detriment of natural gas.”

Cheapest and costliest Q1 property sales revealed
The most and least expensive properties sold in England and Wales in Q1 have been revealed. Land Registry data shows a flat in Sunderland sold for £16,500, making it the cheapest home to change hands between January and March. At the other end of the spectrum, a home in London’s Kensington and Chelsea sold for £22m. The report also shows that there were 1,883 sales where buyers paid more than £1m, including 374 at £2m or more. Average house prices across the UK increased by 10.9% over the year to February 2022, up from 10.2% in January 2022, according to the most recent figures from the Office for National Statistics.

Average house prices hit £500k in two thirds of London areas
Average house prices have now hit at least £500,000 in two-thirds of London areas, according to new research from Savills. In 2019, nearly half of all parts of the capital had an average house price of less than half a million pounds. By 2021, this figure had shrunk by 12% to just 36%.

PwC to offer summer hours after trial delivered a wellbeing boost
PwC is reintroducing summer working hours first trialled last year. Kevin Ellis, chairman at PwC UK, said the decision came after last year’s pilot scheme, in which “positive impact on wellbeing surpassed expectations.” A survey of 6,000 PwC staff found that more than 90% thought summer working hours were a good idea and 73% said it positively impacted their wellbeing. Joe Ryle, campaign director for the 4 Day Week campaign, has welcomed a move away from the eight-hours-a-day, five-days-a-week model, saying: “I think we are seeing companies having to change the way they work to retain staff and attract new talent. Workers feel they deserve a far better work-life balance and are looking for better options.”


GlaxoSmithKline afternoon confirmed that it has changed its name to GSK PLC. The west London-based pharmaceutical firm first announced its intent to change its name in late April, alongside its results for the first quarter of 2022. GSK is still proceeding with the demerger of its Consumer Healthcare business, which was first started in early 2020, and is expected to be completed in July, becoming Haleon.

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 charge our members a fixed annual subscription irrespective of how high the debt value is!

It takes less than 17 minutes to see how you would benefit, do you have the time now?

No face-to-face meeting required – 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.