Business news 2 February 2026

UK businesses are facing a difficult start to February, with tax pressure, stubborn borrowing costs and rising compliance demands all colliding at once. While headline inflation has eased from its peak, costs for employers continue to rise, investment remains weak, and signs of financial stress are spreading from households into the wider SME economy.

For firms that sell on credit, the picture is increasingly clear: customers are under strain, payment risk is rising, and early action on overdue accounts matters more than ever.

James Salmon, Operations Director.

SME-focused & cost pressure stories

Wetherspoon highlights scale of tax burden on UK hospitality

JD Wetherspoon says its 794 UK pubs paid £837.1m in taxes last year, averaging over £1m per site. VAT accounted for nearly half the total, while PAYE, National Insurance and business rates also rose sharply following recent Budget measures. Sir Tim Martin argues pubs are unfairly taxed compared with supermarkets, particularly due to the 20% VAT rate on food.

Why it matters: High fixed taxes squeeze margins, increase insolvency risk in hospitality, and raise the likelihood of late or missed payments to suppliers.

Recording studios warn business rates could force work overseas

UK recording studios used by major artists say soaring business rates are pushing them to the brink. Classified as office space despite fixed capacity, studios report rates bills rivaling rent and limiting their ability to invest or hire. Industry groups warn planned April changes could raise costs by up to 90%.

Why it matters: When rates rise faster than revenues, SMEs are forced to cut spending and delay payments, increasing credit risk across creative supply chains.

Employers expect pay growth to remain elevated

A survey by Incomes Data Research shows employers expect pay growth to remain around 3–4% this year, driven by higher living costs and inflation concerns. Nearly three in ten firms expect wage increases above 3%, despite weak economic growth.

Why it matters: Rising payroll costs reduce cash headroom, making it harder for businesses to pay suppliers promptly and absorb customer payment delays.

Tax rises expected to weigh on growth and investment

Economists warn previously announced tax increases will continue to drag on UK growth for at least the next year. The EY Item Club forecasts growth of just 0.9% in 2026, with business investment expected to contract this year amid fiscal tightening and global uncertainty.

Why it matters: Weak growth and falling investment typically translate into slower customer payments and higher bad debt risk for SMEs.

HMRC launches penalty points system for late filings

HMRC has begun trialling a new “penalty points” system to replace automatic fines for missed tax deadlines. Persistent non-compliance will trigger £200 penalties, with full rollout for higher-earning sole traders and landlords from April 2026.

Why it matters: Compliance failures can quickly turn into cashflow shocks, diverting funds away from suppliers and increasing the risk of overdue invoices.

HSBC launches digital tax tool ahead of MTD changes

HSBC UK has launched “My Business Finances,” a digital tool to help SMEs manage invoicing and tax reporting ahead of Making Tax Digital for Income Tax. The move comes as many small firms admit they are unprepared for quarterly digital submissions.

Why it matters: Poor tax readiness can lead to penalties and cashflow disruption, which often shows up first as delayed supplier payments.

Economic & political developments

Interest rates expected to remain at 3.75%

The Bank of England is widely expected to hold interest rates at 3.75%, with inflation still well above target and wage growth remaining sticky. Most economists now expect the next rate cut no earlier than April.

Why it matters: Higher-for-longer rates keep borrowing expensive, increasing financial stress on both SMEs and their customers.

Mortgage approvals fall despite firmer house prices

Mortgage approvals fell to an 18-month low in December, reflecting weak housing market momentum. However, house price growth surprised to the upside in January, suggesting supply constraints are supporting prices despite low transaction volumes.

Why it matters: Housing slowdowns often ripple into construction, retail and professional services, affecting payment behaviour across multiple SME sectors.

Welfare payments outstrip wages for millions

Analysis shows benefits now exceed wages for around 6m UK workers, with welfare spending projected to rise sharply by 2030. Critics warn this risks weakening work incentives and productivity.

Why it matters: Labour shortages and higher wage demands increase operating costs, tightening cashflow and heightening payment risk for suppliers.

UK seeks closer EU ties while rejecting customs union

Sir Keir Starmer has signalled a desire to deepen UK-EU economic ties, including renewed engagement on trade and defence cooperation. However, he ruled out rejoining a customs union, keeping long-term trade arrangements uncertain.

Why it matters: Ongoing trade uncertainty complicates pricing, contracts and cross-border credit risk for UK exporters and suppliers.

Industry & corporate stress

Barry M seeks buyer amid rising costs

Cosmetics brand Barry M has filed for administration after rising manufacturing costs and supply-chain disruption eroded margins. Despite turnover of £17.4m, the business is now seeking a rescue deal.

Why it matters: Even established brands with strong sales can fail when costs rise faster than revenues, leaving trade creditors exposed.

Jewellery retailer collapses as demand weakens

Family-run jeweller C W Sellors has entered administration, resulting in 36 redundancies. The firm cited rising costs and falling consumer demand amid the cost-of-living crisis.

Why it matters: Consumer spending pressure increases insolvency risk in retail, often leading to unpaid supplier balances.

Craft brewing group rescued in £4.5m deal

Keystone Brewing Group has been acquired out of administration in a £4.5m rescue that saved 145 jobs. The new owners plan to invest £2m into revitalising heritage brands.

Why it matters: Rescue deals protect some suppliers, but usually follow periods of delayed or renegotiated payments.

Steel industry warns of £500m green levy

UK steelmakers warn changes to the Carbon Border Adjustment Mechanism could add £500m a year in costs. Industry leaders fear domestic producers will be undercut by cheaper imports.

Why it matters: Policy-driven cost shocks increase insolvency risk and pressure payment terms throughout industrial supply chains.

Market snapshot

Global markets experienced sharp volatility, led by a dramatic sell-off in commodities. The S&P 500 stands at 6,939, the Dow at 48,892 and the Nasdaq at 23,462 after several days of declines. In Europe, the FTSE 100 is at 10,225, the DAX at 24,590 and the Euro Stoxx 50 at 5,937.

The market selloff was driven by multiple factors:

• Precious metals rout: A dramatic plunge in gold and silver prices created risk-off sentiment across markets
• Fed Chair nomination: President Trump’s selection of Kevin Warsh as the next Federal Reserve chairman triggered market volatility, as investors reassessed expectations for monetary policy
• AI concerns: Worries over artificial intelligence spending exacerbated the selloff, particularly impacting tech-heavy indices

Asian markets fell heavily, with South Korea’s Kospi down more than 5% and Hong Kong’s Hang Seng down 3%. Precious metals suffered historic losses, with gold falling more than 9% to around $4,400 an ounce and silver plunging sharply after an extended rally unwound. Oil prices dropped over 5% as supply concerns eased and the US dollar strengthened.

Sterling remains under pressure, trading at roughly 1.370 against the dollar and 1.155 against the euro. Market volatility and tighter financial conditions continue to weigh on confidence.

Insolvencies and winding-up activity

Appointments of administrators

• AIR (UK) CONSULTANCY SERVICES LTD
• BLINK PRINT LIMITED
• ENGAGE WORKS LIMITED
• GIANT PEACH PUBS LIMITED
• INVENTIVE SERVICE COMPANY LIMITED
• INSURESTREET LIMITED
• NIRVANA SOLUTIONS LIMITED
• PEACH ALMANACK LIMITED
• PEACH COUNTY LIMITED
• PEACH MELBA LIMITED
• PEACH ON THE WATER LIMITED
• PEACH PADDY CLUB LIMITED
• PRETTY AS PEACH LIMITED
• PURE PEACH LIMITED
• REVOLUCION DE CUBA LIMITED
• REVOLUTION BARS (NUMBER TWO) LIMITED
• REVOLUTION BARS LIMITED
• STALBRIDGE PARK HOMES LIMITED
• THE FACTORY SHOP LIMITED
• THE PEACH PUB COMPANY LIMITED
• THE PEACH PUB COMPANY (HOLDINGS) LIMITED
• THE PEACH PUB PROPERTIES LIMITED
• THE REVEL COLLECTIVE PLC

Appointments of liquidators

• A.T.Q. SOFT LIMITED
• AGRIMETRICS LIMITED
• AMB ENGINEERING SERVICES LIMITED
• AMBASSADOOR INDUSTRIAL DOOR SYSTEMS LIMITED
• AVALON PROPERTY DEVELOPMENTS LIMITED
• BOYCE HATTON PROPERTIES LIMITED
• BRODIES MIDDLE EAST LLP
• CAPE BLUE LIMITED
• CONWAY PACKING PROPERTIES LIMITED
• CONWAY PACKING SERVICES HOLDINGS LIMITED
• CP TOPCO 23 LIMITED
• DATA INSTALLATION & NETWORKING SERVICES LIMITED
• DATA TECHNIQUES GROUP LIMITED
• DINSL LTD
• EDUCATE SCHOOL SERVICES LTD
• EVERGREEN CAPITAL ADVISORS LIMITED
• FASA LIMITED
• FIERA PROPERTIES (EUROPE) LIMITED
• GENERGY POWER LTD
• GOV GRANT CHECK LTD
• IAWL LIMITED
• KALLOS GALLERY LIMITED
• KHAJWAL & COMPANY LTD
• LE CAFE AUTOMATIQUE LIMITED
• LEMON AI LIMITED
• LWU LTD
• MARMI HOMES LIMITED
• MARSHALL MOORE LIMITED
• MOSAIC HOTELS LIMITED
• MURRAY PROJECT MANAGEMENT LIMITED
• NORTH PB GROUP LIMITED
• NORTH PRT LIMITED
• PRB DEVELOPMENTS LIMITED
• ROCPOOL RESTAURANT LTD
• SCALEKA LIMITED
• SOUTH YORKSHIRE ORTHOPAEDIC SERVICES LIMITED
• THE PAIN CLINIC BRISTOL LIMITED
• THOMPSON CAVENDISH LTD
• W. & H. REEVES LIMITED
• WORKSIDE LIMITED

Petitions to wind up (companies)

• 231 VICTORIA LTD
• ALL DAY BUSINESS LIMITED
• BOLTON ROAD LTD
• CALMONT HOMES (OAK MEADOWS) LIMITED
• DYNAMIC INNOVATIONS LIMITED
• FORNACELLI LTD
• GABEGAIN LIMITED
• GRAND RESIDENTIAL LIMITED
• HAYDON HILL PAVING LIMITED
• K & K RETAILS LTD
• LEINSTER INNS LIMITED
• MAXIM WORLD LIMITED
• NEW S&S PROPERTIES LTD
• OPES LIVERPOOL LTD
• PICAFFO LIMITED
• PLAISTOW HALAL LTD
• ROX FOOD SERVICES LIMITED
• SMART TOUCH (MK) LTD
• THATCAR LTD
• TIARI SOLUTIONS LTD
• WALL STREET KITTS LTD
• WRIGHTS JOINERY LIMITED

Winding-up orders

• ANNE JAGGER RECRUITMENT LIMITED
• ERO-TREE HOLDING LIMITED

What CPA can do for you

With costs rising, customers under pressure and insolvency activity increasing, protecting cashflow has never mattered more. CPA helps businesses spot early warning signs, verify customers, and recover overdue invoices quickly and professionally before debts escalate.

Just call Peter Uwins, CPA’s National Sales Manager, on️ 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