Business news 19 January 2024
Many small business owners regret not asking for help sooner. Small business confidence grows. Interest rate cuts, retail, Fujitsu, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Many small business owners regret not asking for help sooner
Nearly half of small business owners (47%) feel they could have got their enterprise up and running more quickly – if they had asked for more help when they were first starting out, according to research commissioned by Santander UK. The survey of 500 adults, who run their own business, found that almost eight in 10 (77%) did ask for help in the early days – with 51% saying they sought practical support. This included advice on getting started, managing staff, networking, legal support, tax, payroll, and technology. Sarah Willingham, entrepreneur and Dragons Den star, said: “Asking for help is like pushing on an open door – there are so many people and organisations out there willing to help, guide, and support business owners.”
Small business confidence grows
Optimism among small and medium-sized enterprises (SMEs) is at its highest level in almost two years, driven by a rise in output in December, according to a survey compiled by NatWest. However, the survey reveals a divide in the trading performance of services, manufacturing, and construction businesses. Services-based companies outperformed their larger peers, while manufacturers recorded a fifth consecutive month of decline in production volumes. Construction firms saw a slightly reduced decline in output, but the survey results remained negative. James Holian, head of business banking at NatWest, said: “After a turbulent year for the economy, it is really encouraging to see that small businesses ended 2023 in higher spirits, with growth accelerating at the fastest rate since May. With business confidence now at its highest level in over a year, there’s a real sense of momentum as we start 2024.”
EY Item Club predicts UK interest rate cuts in May
The EY Item Club predicts that UK interest rates will start to be cut in May, as inflation is expected to fall to the Bank of England’s 2% target by that time. The annual UK consumer prices index inflation rose to 4% in December, slightly above economists’ expectations. However, the EY Item Club’s Martin Beck believes that the stickiness in inflation will be temporary, with falling wholesale gas prices and slowing pay growth contributing to a gradual decrease in prices. The EY Item Club expects interest rates to fall from 5.25% to 4% by the end of the year.
Retail
December sales fell 3.2% – below estimates of a 0.5% fall – in the biggest fall since the pandemic as November’s Black Friday impacted on December sales. The drop raises the chances of a recession.
Currys boss blames Hunt’s ‘ill-judged’ policies for high street decline
Jeremy Hunt’s policies are to blame for the decline of Britain’s high streets, the boss of Currys has said, as he launched a fresh plea for the Chancellor to stop loading costs on “overburdened” retailers. Alex Baldock, chief executive, hit out at Mr Hunt’s “ill-judged” plans to increase business rates at the same time as pushing up the national minimum wage and plotting new recycling legislation. The latter move is expected to increase costs for retailers as they will no longer be able to charge for recycling. Currys is responsible for half of all the UK’s electrical waste recycling.
Fujitsu staff had ‘unrestricted’ access to Post Office branch systems
Fujitsu staff had ‘unrestricted and unaudited privileged access’ to Post Office branch systems, according to an internal document revealed in the Post Office Horizon IT scandal inquiry. The document from August 2002 expressed concern over the access given to Fujitsu’s Software Support Centre (SSC) staff, stating that they had access to the live system without full auditing and with unrestricted actions. The document warned of the risk of financial fraud, errors, and data protection infringement. During the inquiry, John Simpkins, a team leader within the SSC, confirmed that staff had remote access to the live system but disagreed with the possibility of committing financial fraud. The inquiry also heard about manipulated audit data used by the Post Office in criminal investigations.
Separately, Fujitsu has said they won’t bid for any Government contracts until the Post Office Inquiry is over.
UK Chancellor signals desire to cut taxes
Jeremy Hunt has indicated that he would like to cut taxes in his March Budget, acknowledging that a low-tax environment would be better for growth. Speaking at the World Economic Forum in Davos, the Chancellor said: “I believe fundamentally that low-tax economies are more dynamic and more competitive, and in the end, generate more wealth for public services like the NHS.” Mr Hunt said inflation was coming down and he thinks it will continue to fall. This would pave the way for faster interest rate cuts by the Bank of England, as well as reducing the Government’s huge debt interest bill. In turn, this could give Mr Hunt more headroom for tax cuts in the spring Budget. Mr Hunt’s comments came a day after Rachel Reeves, the shadow chancellor, hinted she might cut taxes on workers if Labour win the upcoming general election.
Thousands of workers face crippling tax demands over ‘loan charges’
Up to 60,000 workers are facing crippling tax demands from HMRC over ‘loan charges’, with the scandal being compared to the Post Office Horizon controversy. HMRC has admitted that there have been 10 suicides linked to the pursuit of these charges, and one woman even had an abortion due to a crippling tax demand. The taxman has targeted individuals, including teachers, nurses, and cleaners, while ignoring firms that promoted tax avoidance schemes. The issue primarily affects self-employed and freelancer workers and contractors who were paid through umbrella companies. DUP MP Sammy Wilson warned that the situation has “frightening” parallels with the Post Office IT scandal. Conservative MPs also criticised HMRC for the devastating consequences of the loan charge, accusing the tax office of having a vendetta and torturing individuals. HMRC defended its actions, stating that the loan charge aims to recover tax that has been avoided by disguising income as loans. Several outlets note that Conservative peer Michelle Mone’s husband, Doug Barrowman, is linked to a series of tax avoidance companies that may have assisted their clients in submitting misleading claims to HMRC.
Crowe and CMB launch manufacturing survey
Crowe, the national audit, tax, advisory and risk firm, together with CBM, the trade association representing metal forming companies, have launched a Manufacturing Outlook – Winter Survey 2024 to assess the financial situation of manufacturers in the coming year. Despite recent challenges, the manufacturing sector remains optimistic about growth and has been investing in sustainable production and digitisation. However, the survey reveals that financing continues to be a major issue for the sector, with limited access to capital resources and expensive lending.
Alphabet
Alphabet will be investing $1 billion through Google in building a new data center in the UK in Waltham Cross, London
Sage
Sage posted record sales in the company’s first quarter, with total revenue up 10% in the period. The software company benefited from strong performance in its North America division. Sage’s share price was modestly higher in late trading.
Port Talbot
Tata is pushing ahead with the furnace closures, putting 3000 jobs under threat. The closure of Britain’s biggest steel plant would leave the country set to be the only major economy without domestic steel production.
Google
LNER strikes
Aslef have announced 5 more days of strikes on the LNER (London North Eastern Railway).
Latest Insolvencies
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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 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.