Business news 23 February 2022
James Salmon, Operations Director.
Businesses write off £8 in every £100 as late payment culture endemic. CBI chief criticises tax burden .UK customs duties jump 64% in a year . Employers face ‘legal vacuum’ when all Covid restrictions lift in England. And more business news.
Businesses write off £8 in every £100 as late payment culture endemic
According to the latest research from Atradius, businesses wrote off 8% of invoices or £8 in every £100 charged, evidence that the late payment culture endemic to UK business life, continues.
The shockingly high amount of debt being written off as noncollectable following non-payment shows the very real need to credit check clients in advance and to be quick to chase late payments. Clearly the late payment culture endemic is still very much alive despite the huge amount of support and financial assistance provided by Government during the pandemic.
The research from Atradius also showed 44% of all invoices were reported as overdue in the last year, underlining the scope of the late payment culture. Covid wasn’t the only virus endemic in British culture. Paying suppliers late is as wide spread as ever.
And it is only getting worse with 39% saying they expect it will take longer to collect payments this year.
Those write offs have a direct impact on the bottom line for SME’s! But late payments also hurt small businesses as they tie up cash, distract business owners, eat up time that could be better used and inhibit growth and opportunity.
28% said they were forced to seek additional financing and 26% said they had to delay paying their own suppliers as a result of late payments.
This strain on resource and cash flow creates a negative impact which, in turn, spreads far beyond company finances.
If these issues are impacting you, talk to CPA about how our suite of credit management services can help you.
Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
CBI chief criticises tax burden
The president of the Confederation of British Industry, Lord Bilimoria, warned Parliament on Tuesday that it is “absolutely the wrong time” to have the highest tax burden in 70 years. The overall tax burden will rise from 33.5% of GDP pre-pandemic to 36.2% by 2026-27. Lord Bilimoria said higher taxes threatened to stifle an already fragile economic recovery.
UK customs duties jump 64% in a year
UK businesses paid a record £4.5bn in customs duties in the year to 31 January 2022, up from £2.9bn in the previous 12 months. The 64% jump could become more painful still since the UK Government introduced a requirement that importers show a declaration about the origin of the goods at the point of entry. Michelle Dale at UHY Hacker Young said: “This shows how the post-Brexit increase in custom costs to UK consumers is really biting.” She continued: “Over the past year custom duties have been a hugely significant additional cost for many businesses. For a lot of them, custom duties have taken a big bite out of their profitability. Businesses who import and export goods between the UK and EU might be questioning whether their business models are viable.”
Employers face ‘legal vacuum’ when all Covid restrictions lift in England
Business leaders are complaining that a lack of guidance from the Government has left employers unsure of their liabilities should staff come to the workplace while sick with Covid and infect others.
UK to lose at least £15bn on Covid support due to fraud and error
The UK Government could lose as much as £16bn to fraud and error across the COVID-19 emergency loan schemes, according to parliament’s spending watchdog. A report from the Public Accounts Committee described the losses as “unacceptable” and said the Treasury should outline exactly what it intends to recover. The furlough scheme is estimated to have suffered the largest fraud and error losses of £5.3bn, followed by the BBLS where £4.9bn is thought to have been lost. According to the National Audit Office’s COVID-19 cost tracker, the Government has spent £261bn on 374 measures. These are expected to cost a total of £370bn over at least the next 20 years. Dame Meg Hillier, the Labour MP who chairs the public accounts committee, said: “Lack of preparedness and planning, combined with weaknesses in existing systems across government, have led to an unacceptable level of mistakes, waste, loss and openings for fraudsters which will all end up robbing current and future taxpayers of billions of pounds.”
Insurers face £350m storm clean-up bill
The havoc wreaked by Storm Eunice has triggered thousands of home insurance claims, with many more still to come. PwC says insurers could face a £350m bill, with the average claim for storm damage around £3,500, according to CompareTheMarket.
UK public sector borrowing lower than forecast
UK public sector borrowing came in at £138.5bn for the financial year to January, about half that posted in the same period the previous year and £17.7bn less than that forecast by the Office for Budget Responsibility in October. However, it was still the second-highest total since records began in 1993. Treasury receipts came in £29.1bn above forecast, which the OBR said reflected “strong performance across taxes, led by income tax, corporation tax and value added tax”. However, interest payments on debt rose from £1.6bn a year ago to £6.1bn in January due to surging inflation, eating into the Chancellor’s first ever budget surplus. Figures from the Office for National Statistics show Government income exceeded spending by £2.9bn last month, smaller than the £3.5bn forecast by the OBR due to those interest payments. Debt interest payments in 2022-23 are set to be £25bn more than the OBR previously expected following the spike in inflation, according to Samuel Tombs, chief UK economist at Pantheon Macro.
GSK – Haleon.
GlaxoSmithKline said the new company resulting from the proposed demerger of its Consumer Healthcare arm in mid-2022 will be called Haleon. The London-based pharmaceutical company announced the separation of its Consumer Healthcare care unit back in June via a de-merger of at least 80% of GSK’s holding to shareholders. The move comes after GSK rejected three bids from Unilever for the division.
Barclays
Barclays revealed pre-tax profits soared to £8.4bn in 2021 as it released cash set aside for pandemic loan losses and notched up record investment banking earnings. The banking giant more than doubled profits from £3.1bn in 2020 thanks to the release of £700m in bad debt provisions, compared with £4.8bn set aside for C-19 loan losses the previous year.
Metrobank
Metrobank has said its turnaround plan is working, despite losing £171.3m last year, after its revenues increased 17 per cent despite the economic impacts of C-19. The London retail bank said its efforts to cut costs and win over customers had started to work, after it set out its turnaround plan, to rejuvenate its finances, in February 2020
Sanctions
Russia’s escalation of its conflict with Ukraine has so far drawn limited sanctions against a hand full of Banks and individuals close to Putin, from the West so markets have eased. Meanwhile, German Chancellor Olaf Scholz effectively froze the Nord Stream 2 gas pipeline’s approval process.
Rio Tinto
Rio Tinto reported a sharp rise in annual earnings boosted by higher commodity prices as the Anglo-Australian miner paid out its highest total dividend ever. For 2021, Rio generated sales revenue of $63.50 billion, up 42% from $44.61 billion in 2020 as pretax profit doubled to $30.83 billion from $15.39 billion. Adjusted underlying earnings surged to $21.4 billion.
Senior BoE official signals ‘modest tightening’ of monetary policy
Dave Ramsden, a deputy governor of the Bank of England, has asserted that inflation can be kept under control in the coming months with just a “modest tightening” of monetary policy.
Inheritance tax receipts soar by £700m
The Treasury received £5bn in inheritance tax (IHT) receipts in the financial year up to January 2022, an increase of £700m for the same period a year earlier. The 14% increase has been attributed to sustained property price growth and asset price inflation pushing up the value of estates. Shaun Moore at Quilter says that with the average UK property only £50,288 short of the standard nil-rate band, many more people could soon face a hefty IHT bill. The Chancellor has frozen the tax-free limit until April 2026. Julia Rosenbloom, tax partner at Smith & Williamson, warned that the next Budget could bring in changes to personal taxes that may affect plans to pass on wealth and families should prepare accordingly.
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 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
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.