Business news 24 December 2024
Business confidence hits new low. UK economy flatlines in Q3. Tax, family disputes, sick employees, WFH, EV’s, markets & more business news that we thought would interest our members.
James Salmon, Operations Director.
Business confidence hits new low
Business confidence in the UK has fallen to its lowest level in 2024, dropping two points to 39%, according to the latest Lloyds Business Barometer. Despite this decline, 55% of businesses expressed optimism about the broader economy, with nearly two-thirds anticipating stronger output. However, 19% of respondents plan to reduce their workforce, the highest figure in nine months. Additionally, 64% of companies expect to raise prices, complicating efforts to curb inflation. Paul Kempster, managing director for relationship management at Lloyds, said: “Although overall confidence dipped this month, we’re still optimistic that firms’ trading prospects will return to the levels seen earlier this year.”
UK economy flatlines in Q3
The latest data from the Office for National Statistics indicates that the UK economy did not grow in the third quarter of 2024, contradicting earlier estimates of a 0.1% increase. This stagnation places the UK alongside Italy as the lowest growth performer in the G7 during this period. Additionally, growth for the second quarter was revised down to 0.4%. Furthermore, real household disposable income per person showed no growth, following a previous increase of 1.4%. And this was before the massive tax rises in the budget!
Christmas feuds threaten inheritance
Research reveals that one in five individuals remove family members from their wills following disputes, while one in three do so simply due to dislike. With these figures in mind, Debra Burton, partner in inheritance disputes at Lime Solicitors, warns: “With so many family members coming together in close proximity, Christmas celebrations can often bring unresolved tensions to the surface. If these tensions develop into something more serious, those who have written a will may decide to disinherit family members.”
IFS warns of more tax hikes ahead
Rachel Reeves may need to implement further tax increases next year following a concerning growth downgrade that has left Britain on the brink of recession. Paul Johnson, director of the Institute for Fiscal Studies, warned that the Chancellor could face “coming back for more” tax rises in the autumn due to a revised economic growth estimate of zero for the third quarter of 2024. The economy also shrank by 0.1% in October, raising fears of two consecutive quarters of negative growth. Living standards have declined, with GDP per capita falling by 0.2% compared to the previous year. Johnson cautioned that higher inflation could complicate Reeves’s efforts to manage borrowing costs, indicating that “it’s going to be an incredibly tight spending review next year.” Meanwhile, Sir Keir Starmer has warned that economic prosperity “won’t happen overnight” as the Prime Minister failed to rule out having to raise taxes further to balance the books.
Sick people still going to work due to money worries
Research indicates that financial concerns are compelling many sick workers to return to work while still unwell. A poll revealed that over 40% of employees believe increasing statutory sick pay (SSP) should be a government priority, as the current rate of £116.75 per week is among the lowest in the OECD. The Centre for Progressive Change (CPC) found that one in 10 sick workers returned to work due to cash worries, with 12% reporting worsened health from working while ill. Union leaders have called for an increase in SSP, stating: “We’ve heard of workers delaying their cancer treatment because on £116 a week they don’t know how they’ll be able to put food on the table.” William Roberts, chief executive of the Royal Society for Public Health, stressed the need for workers to prioritise their health without financial strain.
Is working from home losing its charm?
Working from home (WFH) has become a double-edged sword for many Brits. While it offers convenience, a recent survey reveals that around 40% of the workforce is feeling the strain. According to the Office for National Statistics (ONS), half of remote workers are increasingly frustrated by challenges such as unproductive video calls and distractions. Notably, 90% believe many video meetings could have been emails, and a third feel less productive at home. Despite these concerns, a significant portion of workers would rather quit than return to the office full-time.
EV consultation launched
Transport Secretary Heidi Alexander has launched a consultation on the phasing-out of new petrol and diesel cars by 2030 and the switch to electric vehicles (EVs). The ban on UK sales of petrol and diesel vehicles had been extended to 2035 under the previous Conservative government but Labour said it would restore the 2030 deadline in its election manifesto. The government is now seeking views from automotive and charging experts to “restore clarity” on how to deliver the ban. Last month, Ford said the UK government’s mandate to produce and sell more electric vehicles (EVs) “just doesn’t work” without demand. Lisa Brankin, Ford UK’s chair and managing director, told BBC Radio 4’s Today programme: “The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.”
Markets
This morning on currencies, the pound is currently worth $1.254 and €1.206. On Commodities, Oil (Brent) is at $73.20 & Gold is at $2618.
On the stock markets, European stocks are following Asian shares higher in subdued pre-holiday trading after a US rally led by megacap tech stocks. The FTSE 100 is up at 8134 and the Eurostoxx 50 is up at 4866. Overnight in the US the S&P 500 rose 0.73% to 5974.07 and the NASDAQ rose 0.98% to 19764.89. Semiconductor companies Nvidia and Broadcom topped index gainers on a points basis, followed by Meta and Tesla. Apple also closed at a record high with expectations that the titan will hit the $4 trillion market-cap milestone by early 2025.
HMRC faces backlash over VAT penalties
HM Revenue and Customs (HMRC) has come under fire for its handling of an IT error that has led to incorrect penalties being applied to some customers’ VAT accounts. The issue, which affected VAT returns submitted on 7 December 2024, resulted in these returns not being processed, despite being filed on time. Tax expert Dan Neidle highlighted the lack of communication from HMRC, stating: “They haven’t emailed/written to affected taxpayers, and so many won’t know this.” An HMRC spokesperson acknowledged the problem, assuring that any wrongly applied penalties would be removed and that they are “working swiftly to correct them.”
Check your pay this Christmas
As Christmas approaches, seasonal workers, including students, are advised to carefully examine their pay slips to ensure compliance with minimum wage laws. The current minimum wage for those aged 21 and over is £11.44 per hour, while those aged 18 to 20 should receive at least £8.60. HMRC says that all workers, regardless of their employment duration, are entitled to the National Minimum Wage. In a recent video, HMRC asked: “Have you started a Christmas job? No matter how long you’ve been employed for, you are legally entitled to be paid at least the National Minimum Wage.”
EY faces fraud allegations from investors
EY has been accused of facilitating a fraudulent scheme involving Brooge Energy, a UAE oil storage company, in a lawsuit filed in the Southern District of New York. Shareholders allege that EY played a “pivotal role in a years long scheme” to defraud investors during a 2019 SPAC transaction, which initially valued Brooge at over $1bn. Following the revelation of fraud, Brooge’s shares plummeted by 99%. The lawsuit claims EY failed to detect clear signs of fraud and assisted in a “round-tripping scheme” to conceal falsified revenues. Neil Richardson, an investor involved in the lawsuit, stated: “This is an astonishing story of brazen, long-running, egregious fraud.” EY has denied the allegations, asserting that responsibility lies with Brooge’s principal shareholders and senior officers. The US Securities and Exchange Commission previously charged Brooge with using “false invoices” to inflate revenues by up to 80%.
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!
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.