Business news 21 November 2024
Some of the business news that we thought would interest our members.
James Salmon, Operations Director.
Inflation climbs to 2.3%
Office for National Statistics (ONS) data shows that inflation has risen back above the Bank of England’s 2% target, climbing to 2.3% in October. This exceeds the 2.2% rate forecast by economists and is up on September’s 1.7%. The increase was driven by a rise in energy bills, with regulator Ofgem having increased its price cap by 9.5%. Joe Nellis, economic adviser at MHA, noted that the increase marks the biggest rise in inflation since October 2022. Darren Jones, Chief Secretary to the Treasury, said: “We know that families across Britain are still struggling with the cost of living. That is why the Budget last month focused on fixing the foundation of our economy so we can deliver change.” Shadow Chancellor Mel Stride commented that it is “worrying” that inflation “is running ahead of expectations and official forecasts state these figures are not expected to improve.” Suren Thiru, economics director at the ICAEW, said the ONS figures “confirm a disappointing resurgence in inflation as the recent tailwind from lower energy costs turned into a headwind in October.”
Inflation fears rise post-Budget
Taxes hikes introduced in the Budget could drive inflation up to 3% in 2025, RSM economist Thomas Pugh has warned. Anna Leach, chief economist at the Institute of Directors, has suggested that the Budget has “shattered business confidence” and could lead to further inflationary pressures. Sanjay Raja, chief UK economist at Deutsche Bank, says that the rises in employer National Insurance contributions will “almost certainly” push inflation higher, while Kris Hamer, director of insight at the British Retail Consortium, said: “If the Government wants to prevent a return to high inflation, it needs to consider mitigating the impact of these costs on retailers.”
Nearly 1m workers ‘lost’ due to unreliable official data
The Resolution Foundation has warned that almost 1m UK workers have been “lost” due to inaccurate and unreliable official data. The think-tank has accused the Office for National Statistics (ONS) of misrepresenting trends in the job sector, saying it has underestimated employment growth by 930,000 workers since 2019, producing an “overly pessimistic picture” of the UK labour market. The ONS has itself expressed concerns about the accuracy of data from its Labour Force Survey due to poor response rates since the pandemic. The Resolution Foundation has developed its own estimate of UK employment, using HMRC payroll and self-employment data, and says the employment rate could be around 76%, rather than the official rate of around 75% reported by the ONS.
Hospitality insolvencies rise
Insolvencies in the hospitality sector have increased by 5% year-on-year, according to analysis by RSM UK, with 3,679 bankruptcies reported in the year to September 2024, up from 3,490 the previous year. Saxon Moseley, head of leisure and hospitality at RSM UK, warned that the industry is facing “the calm before the storm” as upcoming Budget measures, including a reduction in business rates relief and increases in the national minimum wage, are set to exacerbate financial pressures.
One in five running side hustles
Research from Sage reveals that 75% of UK residents believe side hustles are the future of work, with 19% managing multiple ventures alongside their main jobs. The trend is particularly strong among younger generations, with 66% of 16-24-year-olds wanting to pursue their side hustles full-time. The rise of side hustles is reshaping employment dynamics, with 58% of under-34s adjusting their working hours to accommodate their projects.
Sage CEO: More firms will replace workers with AI
Steve Hare, chief executive of software firm Sage, believes that more businesses will replace workers with AI as tax hikes will increase efforts to cut costs. He said that while a “trend towards a more digital economy was already there,” measures set out in the Budget are likely to accelerates it. Mr Hare said Sage does not want to replace staff with AI, insisting that it will utilise the technology to “elevate the work of humans.”
Retailers ‘reeling’ from tax hikes – Lidl boss
Lidl GB chief executive Ryan McDonnell has expressed concerns over the impact of the recent Budget, warning that retailers are “reeling” from tax increases that will exacerbate inflationary pressures. The Budget introduced a £25.7bn change to employers’ National Insurance contributions, which will increase the tax rate and lower the payment threshold. Mr McDonnell, who said the sector is facing a £7bn hit from the changes, said firms were placed “on the back foot” by the Chancellor’s announcement, with some of the resulting costs “completely unexpected.”
High street retailers call for rate reduction
Andrew Goodacre, chief executive of the British Independent Retailers Association (BIRA), has warned that the costs of higher employer National Insurance contributions and an “inflation-busting” rise in the minimum wage will hit high street retailers. He cites a letter signed by more than 80 retailers and sent to the Chancellor, noting that it warns of “higher inflation, slowing pay growth, shop closures and job cuts.” Mr Goodacre argues: “We don’t feel that letter goes nearly far enough,” saying BIRA members are “reeling from the coming increase in business rates,” which are set to double as a tax reduction introduced during the pandemic drops to 40% from 75%. While ministers have made a commitment to reducing business rates in 2026, Mr Goodcare says retailers “cannot understand why business rates have been increased, only to be reduced again.” He has urged the Chancellor to reverse the hike, saying high street shops “can take no more.”
Stamp duty costs set to climb
The decision to revert stamp duty from 3% to 5% in the Budget will see homebuyers pay around £10bn more in land duties by the end of the decade, according to analysis. The changes mean receipts will jump from £8.6bn this year to £18.1bn by 2030. The average bill for stamp duty has jumped from £5,600 in 2013 to £9,037 last year. The changes also mean that anyone buying a second property faces an additional charge of £6,192, based on average house prices. Paul Johnson, head of the Institute for Fiscal Studies, said stamp duty was “the most damaging tax we have” and warned that increasing it would make “things even more immobile and increase rents even further.”
Rayner refuses to rule out further IHT hike
Amid an ongoing debate about the Government’s inheritance tax changes, which have drawn criticism from concerned farmers, Deputy Prime Minister Angela Rayner has refused to rule out further tax increases, insisting that “the vast majority of estate owners will be totally unaffected.” She said: “I absolutely stand by the figures the Government have set out,” and added that she was “sorry” to hear that farmers were “distressed by what I would say is scaremongering around what the Labour Party is doing.” Meanwhile, Environment Secretary Steve Reed has rejected claims that the Government underestimated how many will be affected by the change. Despite Treasury data suggesting three-quarters of farmers will pay no inheritance tax, Defra data indicates that 66% of farm businesses exceed the £1m threshold for the new 20% tax.
Ministers urged to issue IHT impact assessment
The Chancellor has been accused of “negligence” for implementing changes to inheritance tax that could severely impact family farms. Campaigners argue that Labour’s introduction of a £1m cap on agricultural property relief was made without a proper impact assessment. A Treasury source says an official assessment will not be published until next year’s Budget – six months before the tax takes effect. Jonathan Roberts, of the Country Land and Business Association, said: “If they haven’t done an impact assessment, that is negligence. If they have, but they are refusing to publish it, that is a lack of transparency.”
HMRC pays almost £1m for tax fraud tip-offs
HMRC paid out almost £1m to those making tip-offs over tax fraud in 2023/24, with this the highest rate in seven years and 92% up on the £508,500 paid out the year before. Analysis by Price Bailey shows that HMRC received 151,763 anonymous tip-offs in 2023/24, with this down on the 157,270 reports received in 2022/23. Price Bailey partner Andrew Park said that “while HMRC has paid out a record amount to tax whistleblowers, it is still a paltry sum when set against the billions lost to tax fraud every year.” The payouts came as part of the tax office’s effort to reduce its £39.8bn tax gap. It is noted that the IRS in the US makes larger payments to whistleblowers, with the tax agency handing over a combined $89m to 121 whistleblowers, with this leading to the recovery of $338m in tax.
Latest Insolvencies
Appointment of Administrator – PALMERS GREEN DEVELOPMENTS LIMITED
Appointment of Administrator – FILMDOO LIMITED
Appointment of Administrator – KRF SERVICES (UK) LTD
Appointment of Liquidators – PORTCHESTER BUILD LIMITED
Appointment of Liquidators – MPD CONTRACTORS LIMITED
Appointment of Liquidators – CORTEN MANAGEMENT UK LIMITED
Appointment of Liquidators – STRATTON MORTGAGE FUNDING 2020-1 PLC
Appointment of Liquidators – OPERANDUM GROUP LTD
Appointment of Liquidators – STRATTON MORTGAGE FUNDING 2021-3 PLC
Appointment of Liquidators – SALTI CONSULTING LIMITED
Appointment of Liquidators – JWDGAS CONNECTIONS LIMITED
Petitions to wind up (Companies) – MNS DEVELOPMENTS LIMITED
Petitions to wind up (Companies) – AMALAN CONVENIENCE STORE LTD
Petitions to wind up (Companies) – AIRSHACK PROJECTS 359 LIMITED
Petitions to wind up (Companies) – BURNAGE HOLDINGS LTD
Petitions to wind up (Companies) – RDJ GROUNDWORKS & CIVIL ENGINEERS LTD
Petitions to wind up (Companies) – NEXT GEN LUXURY HOMES LTD
Petitions to wind up (Companies) – PEARSON LOCKE LTD
Petitions to wind up (Companies) – INVESTALET LTD
Petitions to wind up (Companies) – MMJ CLINIC GROUP LIMITED
Petitions to wind up (Companies) – DUTCH FOOD EXPERTS LIMITED
Petitions to wind up (Companies) – HELLENIC DYNAMICS PLC
Winding up Order (Companies) – SHANLEY ELECTRICAL SERVICES LTD
Petitions to wind up (Companies) – LONDON FERMENTARY LIMITED
Appointment of Liquidators – KELVIE & BROWN LTD
Appointment of Liquidators – GS REAL ESTATE HOLDINGS (UK) LTD
Appointment of Liquidators – FINSBURY (DEVELOPMENT) LIMITED
Appointment of Administrator – YELCON LIMITED
Appointment of Administrator – SCOTFIELD GROUP LIMITED
Appointment of Administrator – CAMSTEAD LIMITED
Appointment of Administrator – HACHE BURGER CONNOISSEURS 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!
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Check our compensation calculator to see how much your business could be owed!
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