Business news 18 March 2024
Insolvencies jumped by nearly a fifth last month. Global corporate defaults at highest since 2008. PM plans reforms to boost small businesses. And more business news that we thought would interest our members.
James Salmon, Operations Director.
Insolvencies jumped by nearly a fifth last month
The Insolvency Service has reported a 17% rise in company insolvencies, with 2,102 companies going bust last month.
It said this included 217 compulsory liquidations, 1,707 creditors’ voluntary liquidations (CVLs), 166 administrations and 12 company voluntary arrangements (CVAs).
This is higher than levels seen during the pandemic and pre-pandemic figures. Analysts attribute the increase to high inflation, sharp interest rate rises, and the war in Ukraine. The numbers of compulsory liquidations, creditors’ voluntary liquidations, and administrations were also higher than in February 2023.
Julie Palmer, a partner at Begbies Traynor, said the latest data “paints an unhappy picture for the state of the UK economy”. She adds: “This environment is putting a huge amount of pressure on businesses and the challenge business leaders now face will be insurmountable for many.”
The rise in insolvencies has been blamed on high inflation, the sharp rise in interest rates, consumers tightening their belts and cutting back on expenditure. The Ukraine war and higher energy prices have hit businesses already weakened by the pandemic. Last quarters technical recession was enough to tip many over the edge. Rising late payments have been hitting SME’s hard!
For SME’s who sell B2B on credit it is natural a concern whether the businesses they sell to will also be caught up in the wave insolvencies and cause them financial harm.
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 nsm@cpa.co.uk today.
Global corporate defaults at highest since 2008
High interest rates and inflation have led to more companies defaulting on their debts in 2024 than in any start to the year since 2008. According to S&P Global Ratings, there were 15 defaults in February, bringing the global corporate default tally to 29, the highest year-to-date default count since the financial crisis. Consumer-sensitive stocks are most exposed to the potential for further defaults in 2024, analysts at S&P Global say.
PM plans reforms to boost small businesses
The Prime Minister, Rishi Sunak, will announce a package of reforms at a Business Connect conference in Warwickshire today.
The reforms include creating up to 20,000 more apprenticeships, fully funding training for young people, and cutting red tape for small businesses. The Government will pay the full cost of apprenticeships for under-21-year-olds in small businesses from April 1, aiming to reduce burdens for employers and provide more professional training places for young people. Additionally, businesses paying the Government’s apprenticeship levy can now share up to 50% of unspent funds with other employers, up from the previous 25%. The Government expects these policies to enable up to 20,000 more apprenticeships. The Prime Minister also announced a 50% uplift to the thresholds that determine a company’s size, potentially saving thousands of SMEs around £150m per year.
Furthermore, a new industry-led taskforce will be established to bolster private investment in women-led businesses. The taskforce aims to raise funding for female founder teams, who have received only 2% of equity capital investment in the past decade.
Long-awaited recovery too little too late for PM
After years of gloom, the UK economy is finally showing signs of recovery, wrote Harvey Jones in the Sunday Express, yesterday. The UK economy grew by 0.2% in January, and it is expected to grow by 0.8% this year. Sterling is rising, making imports cheaper and benefiting holidaymakers. Inflation is expected to fall in April, leading to potential interest rate cuts. However, while things are improving, they’re not getting better fast enough for Rishi Sunak. For Sir Keir Starmer, polling day can’t come fast enough, says Jones, and the Labour leaders is going to get his dream job at the perfect time. Just as the economy enjoys lift off. Larry Elliott gives a similar assessment in the Observer, and cites Michael Saunders, a policy adviser at consultancy Oxford Economics, who says the outlook for this year and next is positive, with inflation expected to return to target this year and pay growth will slow without a major rise in unemployment.
EU revised human rights and supply chain law to indirectly hit SME’s
EU countries have approved a revised corporate sustainability directive, drawing criticism from both environmental campaigners and business lobbies. The law, which was agreed in December, has been scaled back and now applies to companies with more than 1,000 employees and a net turnover of €450m. This change is estimated to exclude 70% of the companies the law was meant to cover. The directive provides a framework for communities to sue EU companies for human rights abuses and environmental harm in their supply chains. However, Markus Beyrer, the director general of lobby group BusinessEurope, said the new rules added “unparalleled obligations” and imposed harsh sanctions on companies that would expose them to litigation. “SMEs, even though they are theoretically out of the scope of the directive, will be negatively affected as they make up the largest part of value chains,” he said.
Fiscal drag brings expensive car levy to more car buyers
Drivers who buy cars with a list price over £40,000 face an additional road tax charge of £390 per year for five years, resulting in a total tax add-on of £1,950. Even if the car’s price is negotiated down, the tax still applies. Rising car prices and frozen tax thresholds mean more drivers are being affected by this charge. The average on-the-road price of a car has risen from £36,798 in 2020 to £52,462 today. Electric vehicles are currently exempt from the charge, but this will change from April 2025. Robert Salter from Blick Rothenberg said: “It is another example of fiscal drag. If you buy a second hand car that is under the expensive car supplement but had a list price of more than £40,000 when it first went on the road less than six years ago you will still have to pay the surcharge. So it also affects people who are not buying brand new super expensive vehicles.”
Labour’s workers’ rights plans could hit media freelancers
Companies that rely on casual workers, including the Guardian and the BBC, could face higher tax bills and increased bureaucracy if Labour’s job reforms are implemented. Labour’s plans include giving new recruits default workers’ rights from the start, such as maternity leave and pension entitlements, ending zero-hour contracts, and increasing the minimum wage. The reforms could have a significant impact on the media industry, which heavily relies on freelancers and short-term contracts. Peter Frost, an employment lawyer at Herbert Smith Freehills, warns that businesses which rely on casual workers could “take the view that they require fewer people” under Labour’s reforms. The introduction of “day one” rights for workers could also make it harder for businesses to dismiss underperforming employees. Labour insists that employers can still fairly dismiss people and aims to consult on some policies if it wins power.
Italians used Scottish shell firms to launder mafia money
Two Italians at the centre of a €2bn mafia money-laundering probe have been revealed to have run Scottish shell firms. Michele Scognamiglio and Marco Spinola were arrested as part of an international investigation into an alleged transnational scheme to clean dirty money for various crime gangs. The pair used a complex corporate web, crypto-currencies, and a now closed Lithuanian e-money institution called Trustcom Financial UAB. They were also directors of a company called Trustcom Ltd, which is now in liquidation and owes £7.6m in unpaid taxes, according to liquidator Alistair McAlinden of Interpath Advisory. The suspects offered money laundering as a service to criminals and laundered the proceeds of various criminal activities. The investigation has led to the seizure or freezing of millions of pounds of property and cash. The Lithuanian central bank stripped Trustcom Financial UAB of its EMI license in March 2022. Trustcom Ltd went into liquidation in November 2022.
UK suspends trade talks with India ahead of election
Kemi Badenoch has suspended trade talks with India as there is no chance they will be completed by the next Indian election. The Business Secretary has agreed discussions on a deal will be put on hold because the country is about to announce its election schedule. Despite two years of negotiations, there are still significant sticking points preventing agreement. The UK is insistent that it will not give up its vital interests. British negotiators made a last-ditch attempt to get an agreement over the line before talks were paused, but success was not possible. Boris Johnson originally predicted a deal could be done by Diwali in October 2022, but they stalled and remained unfinished under Liz Truss. The two sides have edged closer under Rishi Sunak, but not enough for a deal to be agreed.
Modest earners now being taxed ‘as if they are rich’
Present-day workers only have to earn 3.6 times average pay to be taxed the highest rate, partly thanks to the threshold being cut from £150,000 to £125,140. The 45p additional rate income tax threshold was 6.2 times average earnings when the Conservatives came to power in 2010. Income tax thresholds were frozen in 2021 and will remain so until 2027-28, pushing millions of taxpayers into higher brackets. In 2023-24, 18% of income taxpayers are projected to pay either the higher or additional rate. Darwin Friend of the TaxPayers’ Alliance said, “The point at which someone is considered to be a high earner is being lowered by stealth with modest income families increasingly being taxed as if they were rich.” The number of people paying income tax has surged by 4.5m since 2010, with 2.5m becoming taxpayers. Ian Cook of Quilter said, “Fiscal drag under the Tories has created a generation of taxpayers who were never meant to fall into these tax bands.”
House Prices
House Prices rose to an average of £368,118 this month, according to the latest data from Rightmove. The data, which looks at the prices of newly-listed homes, reported a 1.5% rise in March. This means the typical asking price has risen by £5,279 from the previous month. This month’s 1.5% price growth is higher than the average historic March increase of 1%, and the biggest monthly increase in prices for 10 months. However, average asking prices are still £4,776 below the May 2023 peak.
Reckitt Benckiser
Reckitt Benckiser shares fell by 18% on Friday following baby formula compensation woes. An Illinois judge has told Reckitt unit Mead Johnson to pay $60m to the mother of a premature baby who died of an intestinal disease. The mother had eaten Enfamil baby formula, a product the company sells.
Barratt Developments
Barratt Developments said that house sales continued to decline in the recent months, yet believes that hopes of a decrease in mortgage costs could spark interest from buyers. In its statement, the company said it had experienced build-cost inflation stabilising across most cost sectors. The group said it was in a strong position for the next year, having secured 70% of the sales for next year.
Latest Insolvencies
Appointment of Liquidators – CARDYKE CONSULTING LIMITED
Appointment of Liquidators – SHAW UTILITIES LTD
Appointment of Liquidators – TOPFLITE CONSTRUCTION LIMITED
Appointment of Liquidators – HBOS COVERED BONDS LLP
Appointment of Liquidators – WEHMEYER UK LIMITED
Appointment of Liquidators – ALPHA LETTINGS LIMITED
Appointment of Liquidators – PAXTONS CONSULTING LTD
Appointment of Liquidators – MC & NC HOLDINGS LIMITED
Appointment of Liquidators – OVERSTONE ABC LIMITED
Appointment of Liquidators – CLARIO LEGAL & HR LIMITED
Appointment of Liquidators – FRONTED HOLDING LTD
Petitions to wind up (Companies) – IT’S OK LIMITED
Appointment of Liquidators – SHRIJEE CONSULTANCY SERVICES LIMITED
Appointment of Liquidators – GREENFIELD EXPLORATION LIMITED
Appointment of Administrator – NHLEX LIMITED
Appointment of Liquidators – PEACOCK DIGITAL CONSULTING LTD
Appointment of Liquidators – JEM RACING PHONE LTD
Appointment of Liquidators – ZILLION SOFT LIMITED
Appointment of Liquidators – BIRD & BIRD (SERVICES) LIMITED
Appointment of Liquidators – CADENCE DELIVERY SERVICES LIMITED
Appointment of Liquidators – DIGNIO LIMITED
Appointment of Liquidators – JKK MANAGEMENT CONSULTING LTD
Appointment of Liquidators – HEYBROOK MEDIA LIMITED
Appointment of Liquidators – GENESIS CONTRACTING HOLDINGS (GLOUCESTER) LTD
Appointment of Liquidators – GALAXY FIREWORKS LIMITED
Appointment of Liquidators – GILL MONK LTD
Appointment of Liquidators – HARRY REED & SON (FURNISHERS) LIMITED
Appointment of Liquidators – MATTU NEWS LIMITED
Petitions to wind up (Companies) – REFINED BY LIMITED
Appointment of Liquidators – MEADOW ACCOUNTING SERVICES LIMITED
Petitions to wind up (Companies) – VALDO FOODS LTD
Petitions to wind up (Companies) – HAYDEN CHILLED LTD
Appointment of Liquidators – ARCHER YATES ASSOCIATES LIMITED
Appointment of Liquidators – M.S. TECHNOLOGIES LIMITED
Appointment of Liquidators – CERTAX ACCOUNTING (MARLOW) LIMITED
Petitions to wind up (Companies) – EA FORMBY (NW) LIMITED
Appointment of Liquidators – OPEN CONSULTING SERVICES LIMITED
Petitions to wind up (Companies) – GUIDI’S LTD
Appointment of Liquidators – SOFT AND SHADY LIMITED
Petitions to wind up (Companies) – BOMATI LTD
Petitions to wind up (Companies) – HERITAGE ENGINEERING GROUP LTD
Petitions to wind up (Companies) – COZZY FOOD CLUB LTD
Petitions to wind up (Companies) – DUBAI SUPERSTORE LTD
Petitions to wind up (Companies) – RIGHT TRACK SCOTLAND LIMITED
Petitions to wind up (Companies) – CONSTRUCT300 LTD
Appointment of Liquidators – ARGEE BUILDING SERVICES LIMITED
Petitions to wind up (Companies) – WEATHERSEAL SCOTLAND LTD
Appointment of Liquidators – P & B PROPERTIES LIMITED
Appointment of Liquidators – IGNIS ASSET MANAGEMENT LIMITED
Appointment of Liquidators – JOE FARRELL (HAULAGE & CONTRACTING) LTD
Appointment of Liquidators – SUSTAINABLE INFRA LIMITED
Winding up Order (Companies) – COGRESS LIMITED
Petitions to wind up (Companies) – SURFACE TECHNOLOGY (SCOTLAND) LIMITED
Petitions to wind up (Companies) – HH14261141 LTD
Appointment of Liquidators – FARSIGHT FINANCIAL LIMITED
Petitions to wind up (Companies) – CHRIS HAY SLATERS & ROOFERS LTD
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 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.