Business news 25 April 2024
Xero reports late payment data. Business confidence surges in Q1.Scottish business collapses up 3%. SME standing Charges, markets, green claims, insolvences & more business news that we thought would interest our members.
James Salmon, Operations Director.
Xero reports late payment data
The latest UK Xero Small Business Insights (XSBI) data shows little change in small business performance between the end of 2023 and the first three months of 2024. Small gains in wages and jobs growth were offset by a further softening in sales growth.
The length of time small businesses waited to be paid after issuing an invoice was 28.4 days in the March quarter, the same as the December quarter. The largest improvement was in the month of March, when this payment time metric was only 27.9 days – 0.9 days faster than February. This improvement, however, is most likely due to the end of financial year and is a pattern in the XSBI data observed at this time in all the countries tracked. The ʻgainsʼ are usually reversed in the following month and revisions reduce the decline over time.
Payment times impacted by end of financial year
Setting aside the March result, which was impacted by the end of the financial year, the average length of time a small business waited to be paid in January and February was 28.7 days – 0.3 days longer than in the December quarter. Average late payment times also rose, up 0.6 days to an average of 6.4 days in January and February.
This is a reversal of the trend over the second half of 2023, when both payment times measures had been gradually getting shorter. We will need to wait until next quarter’s data to understand if this a new trend or not.
Have you been affected by late payments? The Credit Protection Association has been assisting thousands of UK businesses to get paid, since 1914.Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!
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.
Business confidence surges in Q1
Business confidence tripled to 14.4 in the first quarter of 2024, up from just 4.2 in the final quarter of last year, according to the Institute of Chartered Accountants in England and Wales (ICAEW). Surging confidence likely reflected stronger domestic demand, lower inflation and expected falls in interest rates. The UK economy has recorded growth in both January and February, making it likely that last year’s shallow recession is already over. However, companies remain downbeat about their investment plans for the year ahead, with only a 1.6% increase expected. The survey also highlighted firms’ increasing burden of regulation, with 41% troubled by regulatory requirements. Increased scrutiny, reporting requirements, and administrative burdens were also cited as concerns. ICAEW economics director Suren Thiru has warned that weak productivity and supply side constraints continue to limit the economy’s ability to grow, while ICAEW chief executive Alan Vallance expressed concern over businesses’ lack of ambition and the UK economy’s vulnerability to shocks.
Scottish business collapses up 3%
Corporate insolvencies in Scotland have reached their highest level in over a decade, with 1,168 businesses going bust in 2023/24, a 3% increase from the previous year and 23% up on pre-pandemic levels recorded in 2019/20. Personal insolvencies in Scotland also rose by 1% in the same period. The rise in corporate insolvencies is partly driven by an increase in compulsory liquidations, which have grown by almost a third. The economic climate, volatility in consumer confidence, and high costs of rent, energy, and raw materials have contributed to the difficult year for businesses in Scotland. Richard Bathgate, chair of insolvency and restructuring trade body R3 in Scotland and a restructuring partner at Johnston Carmichael, said: “It’s clear that many directors are still having to make tough decisions about their long-term future, and it may be some time before we see insolvency numbers fully stabilise.”
Small firms urge Ofgem to act over standing charges
The Federation of Small Businesses (FSB) has written to Ofgem, urging the energy regulator to act over fast-growing standing charges paid by small companies, particularly those in rural areas. Standing charges are applied daily, regardless of how much energy the customer uses, and are used to cover the cost of supplying energy to homes and businesses. The FSB argues that charges are disproportionately affecting businesses in rural areas, exacerbating the divide between rural and urban areas and undermining efforts to level up more remote parts of the UK. FSB policy chair Tina McKenzie said: “We want Ofgem to do a thorough review of standing charges for businesses as well as consumers, for better transparency and to discern whether energy companies are behaving fairly towards their small firm clients.”
Markets
Early gains in UK shares disappeared yesterday with the FTSE 100 ending modestly lower (down 0.06%) at 8040.38, despite recording another intra-day all-time high at 8090 around lunchtime before profit taking caused the index to slip into the red.
Technology stocks led declines in US equity futures Thursday after Facebook’s (Meta) disappointing outlook for the future hit traders outlooks. With Meta falling almost 15% in post market close trading after projecting lower than expected Q2 sales and revealed billions in planned spending on AI which it wants to integrate with its services.
Overnight in the US the S&P 500 rose a meager 0.02% to 5071.63, the Nasdaq rose 0.1% to 15712.75. The pound is currently worth $1.251 and €1.166. Brent is at $88.3, Gold is at $2325. The FTSE 100 is currently up 0.48% at 8078 and the Eurostoxx 50 is down 0.38% at 4971.
Heathrow
Heathrow Airport has swung to a first quarter profit and upped its outlook for full-year passenger growth after notching up its busiest start to the year.The group posted pretax profit of £189 million for the three months to March 31 (traditionally a quiet season for the sector) against a loss of £60 million a year ago. It said the group enjoyed a record-breaking quarter, with passenger numbers up 9.5% to 18.5 million.
Wind
UK wind power produced more electricity than oil, gas and coal plants in the past two quarters, National Grid data show. And generation is up 26% year on year this month, hitting a record.
Review green claims
UK businesses are advised to review claims they might be making regarding their products and services for any green, environmental sustainability claims being made, to ensure they’re not in the crosshairs of a regulatory crackdown that’s due to take effect at the end of next month (31/5/24).
The Financial Conduct Authority’s (FCA) plan to move ahead with anti-greenwashing rules has major implications for British businesses, and leaves them with only limited time to take action and remove the threat of potential regulatory action.
Richard Monks, sustainable finance partner at EY, said in an emailed statement “The rule will impact all products and services with sustainable features, not just those with a green/sustainable label, which means firms have a large review task to complete now within a short time period. Firms need to urgently review all products and services that are in scope, assessing their risk exposures and creating a clear strategy to reduce their greenwashing risk.”
Mining Mega Merger?
Anglo American confirmed Thursday it was “reviewing” a takeover bid from its larger Australian rival BHP Group (The world’s largest miner) , in what would rank as one of the sector’s biggest deals in years. The all share deal would reportedly value Anglo American at £31.1 billion but Anglo American did not disclose the price of the “unsolicited” offer, which must be sewn up before a deadline of May 22. BHP’s offer would first hinge on Anglo American splitting off its platinum and iron ore operations in South Africa.
Barclays
Barclays reported first-quarter net income attributable to shareholders of £1.55 billion, beating expectations and returning the British lender to profit amid a major strategic overhaul
Sainsbury
Sainsbury reported that revenue edged up 3.8% to £32.70 billion in the financial year ended March 2, from £35.16 billion a year earlier. Pretax profit fell by 15% to £277 million from £327 million. Looking ahead, the company said it is confident of delivering strong profit growth in the year ahead.
AstraZeneca
AstraZeneca reported that revenue rose to $12.68 billion in the first quarter of 2024, up 17% from $10.88 billion a year earlier. Pretax profit jumped to $2.80 billion from $2.62 billion.
Defence spend pledge will not stop tax cuts
Rishi Sunak insists that increasing defence spending to 2.5% of GDP by 2030 will not result in tax rises or cuts to public services. The Prime Minister said: “It is a completely funded plan,” saying reducing a civil service headcount “which has grown considerably over the last few years” will fund the pledge. He added: “We have record investment in our public services, including the NHS, that’s not going to change, it’s going to continue. We have record investment in our schools, that’s not going to change, it’s going to continue to increase. And alongside that we are able to cut people’s taxes.”
Higher earners leaving Scotland to reduce tax burden, research finds
Higher earners are leaving Scotland to reduce their tax burden, HMRC research suggests. Official data found that about 8,000 more people were moving to Scotland than leaving for elsewhere in the UK in 2022. However, the report also found that about 1,030 higher-rate taxpayers — equivalent to £61m in tax receipts — moved south of the Border. “This implies that more individuals moved from Scotland to [the rest of the] UK and/or less individuals moved to Scotland from UK following the policy change,” the report said. A new Scottish tax band of 45% on earnings between £75,000 and £125,140, came into force on April 1. Recent research by Scottish Financial Enterprise, the trade body, found that more than 80% of financial services firms believe the tax divergence is routinely affecting their ability to attract and retain people in Scotland. Overall, the HMRC report found that after 2017, when Scottish tax rates started to diverge from those south of the Border, net migration to Scotland increased and the amount of taxable income moving to Scotland increased from about 2019 onwards.
Billionaires should pay 2% wealth tax, G20 ministers say
The world’s 3,000 billionaires should pay a minimum 2% tax on their fast-growing wealth to raise £250bn a year for the global fight against poverty, inequality, and global heating, according to ministers from Brazil, Germany, South Africa, and Spain. They argue that a 2% tax would reduce inequality and raise much-needed public funds after the economic shocks of the pandemic, climate change, and military conflicts. The ministers are calling for more countries to join their campaign and French economist Gabriel Zucman is working on the technical details of the plan, which will be discussed by the G20 in June. Mr Zucman commented: “Billionaires have the lowest effective tax rate. Having people with the highest ability to pay tax paying the least – I don’t think anybody supports that.”
39% of women take time off work due to poor mental health
Almost four out of 10 women have taken time off work as a result of poor mental health over the past year, according to a new report by Deloitte. The report reveals that the proportion of women calling in sick due to stress, anxiety, depression, or other mental health issues has increased from 35% to 39%. This is higher than the global average of 33%. However, the research also found that two-thirds of women do not feel comfortable discussing mental health at work or disclosing it as the reason for their absence. The report highlights that women from ethnic minority backgrounds face even more challenges, with over half needing time off but only 20% feeling comfortable sharing mental health as the reason with their employer. The study also shows that almost half of the women surveyed in the UK reported increased stress levels, partly due to pressure to return to office working.
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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 offer our members a fixed annual subscription regardless of how high the debt value maybe!
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
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.