business news 22 September 2021

James Salmon, Operations Director.

Pandemic accelerates trend towards card payments
Figures from the British Retail Consortium (BRC) show card payments accounted for more than £4 in every £5 spent in 2020. Debit and credit card transactions accounted for 81% of the value of spending last year, up from 78% in 2019. But the BRC added: “While cash use has declined in importance, it remains vital for many people who do not have access to other payment methods.”

OECD downgrades UK growth forecasts
The OECD has downgraded growth forecasts for the UK this year from 7.2% to 6.7%, and dropped its forecast for 2022 from 5.5% to 5.2%. The organisation also nearly doubled estimates for inflation to 2.3% this year and 3.1% next year – although it suggested the effects are likely to be temporary. The UK is still expected to be the fastest-growing G7 nation this year  after taking the biggest hit from Covid. Globally, the recovery remains very uneven, the OECD said, “with strikingly different outcomes across countries.”

OECD inflation

The OECD, raised its inflation forecasts. Consumer-price inflation across G20 countries is projected to reach 4.5% in the fourth quarter, driven by higher shipping costs and commodity prices, falling to around 3.5% by the end of 2022. Macroeconomic policy support remains “necessary”, the organisation said, until conditions normalise and labour markets recover.

US Trade

After hopes of a one on one trade deal with the US diminshed, the UK is reportedly considering joining USMCA, an existing free-trade agreement between the U.S., Mexico and Canada.

Employees will be able to request to work from home from first day
Ministers are set to confirm new laws to protect flexible working this week. Employees will be able to request the right to work at home from their first day on the job under the reforms. Under current rules, employees cannot request a hybrid working arrangement until six months into a job. A government source said: “The business case is compelling. If you’re happy at work you’re less likely to leave, and companies benefit from motivated employees.” However, Labour has criticised the plans as not going far enough. Deputy leader Angela Rayner said: “Labour will give workers the right to flexible working – not just the right to request it – and give all workers full rights from day one on the job. This is a U-turn from the Conservative manifesto which promised to make flexible working the default and once again the Conservatives have sold out working people.”

Businesses return more than £1bn in furlough claims
The Treasury has revealed that businesses have handed back more than £1bn claimed through the Government’s furlough scheme bringing the total returned to HMRC since July 2020 to £1.3bn. “This Government stepped in to help when people needed it most, supporting 12m jobs through furlough,” Chancellor Rishi Sunak said. “This worked. Nearly two million fewer people are now expected to be out of work in the UK than previously feared. Now with our recovery under way it is heartening to see that £1.3bn in furlough grants have been returned as the economy recovers.” The scheme has cost the taxpayer £68.5bn so far and Nigel Morris, employment tax director at MHA, said the bill will likely hit £70bn by the end of this month. Morris goes on to caution businesses against being caught out by incorrect furlough claims that could result in costly clawbacks by HMRC. He adds: “HMRC and the National Audit Office estimate between 5% and 10% of the total furlough money claimed could represent overclaims.”

Governments must set tax rules, Bezos tells Johnson
Speaking after a meeting with Jeff Bezos in New York on Tuesday, Boris Johnson said he’d urged the Amazon boss to make his company pay more tax in the UK. “What I did say to him was that we in the UK feel very strongly that the internet giants need to be making their fair share of contribution in tax,” the prime minister said. “When you sell many, many billions worth of goods in the UK then you’ve got to expect to be taxed fairly in the UK.” According to the PM, Mr Bezos made it clear that he would not pay tax as an “act of kindness”. Johnson told US media: “He’s a capitalist and he made the very important point that this is a job for governments. And tax isn’t something that he’s going to pay as an ex-gratia act of kindness. It’s up to governments to come up with the right framework.” Amazon paid £492m in UK taxes in 2020, equivalent to 2.3% of the £20.63bn revenue it generated in the country.

Income tax and National Insurance receipts soar
The latest HMRC Tax Receipts and National Insurance bulletin shows receipts for the levies were up £16.2bn on the same period a year earlier. Analysts say the increase is a sign that there is a growing number of people in work. However, some experts fear that the end of the furlough scheme on September 30 2021 will mean that many more people face redundancy. Andrew Snowdon, Partner and Head of Tax at UHY Hacker Young, said: “With the furlough scheme being withdrawn at the end of the month, the increase in National Insurance will have made the cost of keeping jobs that much more expensive.” Employers and employees will both have to pay an extra 1.25% in National Insurance following Boris Johnson’s announcement earlier this month. Mr Snowdon added: “Unfortunately, this extra burden may have helped make the decision for employers who were in two minds over keeping the jobs of those on furlough. It will be the employees who suffer as a result.”

IHT receipts rise to £2.7bn
Official figures from HMRC have found that IHT receipts for the three months from April to August were £2.7bn – a rise of £0.7bn on the same period last year. Julia Rosenbloom, tax partner at Smith & Williamson, said that IHT receipts “are proving to be an increasingly lucrative source of revenue for the Treasury” and provide funds to the Government to help rebuild the country following the pandemic and pay for its planned programme of reforms. “The Prime Minister’s recent announcement introducing a new health and social care levy demonstrates that he is not afraid of tax rises, even if they are unpopular with some members of his own party. This raises speculation that when the Chancellor unveils his Budget next month, personal taxes such IHT and CGT could be in for reform given the amount they raise for the Treasury,” she explained.

August borrowing figures higher than predicted
According to the Office for National Statistics, the Government borrowed £20.5bn last month, £5.5bn less than the same time last year but still the second-highest August on record. Analysts had predicted £15.6bn in borrowing for the month. Economists now think that borrowing is set to come in around £25bn below the £233.9bn predicted by the Office for Budget Responsibility (OBR) for this year, but the Treasury had to borrow more than predicted in August to cover rising interest on the national debt. Danni Hewson, an analyst at AJ Bell, said: “Although the numbers are going the right way, borrowing figures overshot expectations. Interest payments on all that debt shot up, and September will be even more painful when you factor in the latest retail price inflation figures.”


Stagecoach is considering being acquired by rival National Express in a deal that would see Stagecoach own about 25% of the combined group, the companies said on Tuesday. Stagecoach and National Express, confirming media speculation of a proposed tie-up, said they were in talks about a possible all-share deal.


Kingfisher yesterday reported a profit surge in the first-half as the DIY retailer benefited from continued demand for home-improvement projects spurred by the Covid-19 pandemic. For the six months to July 31, the company’s pretax profit grew 70% to £677 million from £398 million. Interim revenue climbed 20% to £7.10 billion from £5.92 billion, while like-for-like sales were up 23% year-on-year and 21% compared to 2020. In the UK & Ireland, like-for-like sales rose 28% in the first half, but are down 1.9% to date in the third quarter.


Halma upgraded its outlook on annual profit following ‘strong progress’ in the first of the year as sales growth topped expectations. ‘We currently expect adjusted profit before tax for the full year to be slightly ahead of our previous guidance,’ the company said.The company previously said it expected to deliver full-year low double-digit percentage organic constant currency profit growth.


Entain said DraftKings had sweetened its takeover for the company to £2.80 per share from £2.50 share.The improved proposal was received on 19 September 2021.

PZ Cussons

PZ Cussons swung to a full-year loss owing to the sale of its Nigerian dairy business Nutricima, though its underlying performance improved and it lifted its dividend. Net losses for the year through May amounted to £16.6 million, swinging from a year-on-year profit of £19.7 million, and included losses on discontinued operations of £51.6 million.

Oxford Biomedica

Oxford Biomedica swung to a first-half profit after its revenue more than doubled, thanks partly to a Covid-19 vaccine agreement with AstraZeneca. Pre-tax profit for the six months through June amounted to £19.2 million, compared to year-on-year losses of £6.1 million.


Saga swung to a modest first-half profit, thanks to gains on a property disposal, but it recorded underlying losses as the pandemic continues to weigh on its cruise business.Pre-tax profit for the six months through July amounted to £0.7 million, compared to year-on-year losses of £55.5 million.

Green prepares for insolvency
The energy company Green has brought in insolvency advisers from Alvarez and Marsal to co-ordinate a plan to save the company. The news followed a refusal from the Government to intervene and prop up small energy firms struggling as a result of the surge in gas costs. Green CEO Peter McGirr had previously warned that the company would fail within three months unless it received state support, but the prospect of any government subsidy for small firms appears to have been ruled out by the business secretary, Kwasi Kwarteng.

Chilled foods distributor on brink of collapse
EVCL Chill, a chilled foods distributor whose customers include Asda and J Sainsbury, is on the brink of collapse. Sources said ongoing issues with driver shortages and wider supply chain costs and challenges were likely to be key factors. EVCL Chill is a division of the independent logistics group EV Cargo. PwC is being lined as the prospective administrator, according to insiders.

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

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.