Business news 26 January 2026

UK businesses begin the week facing a familiar but increasingly uncomfortable mix of weak confidence, rising compliance costs and mounting payment risk. Fresh warnings from the CBI point to subdued private sector activity, while political scrutiny over banking tax treatment and renewed debate on business rates highlight how unevenly pressure is being shared across the economy. Against this backdrop, insolvency data continues to underline strain across construction, property, professional services and technology, reinforcing the need for tighter cash flow control..

James Salmon, Operations Director.

SME-focused stories

Private sector growth surges in January PMI

The UK private sector recorded its fastest growth in nearly two years in January, according to the S&P Global Flash PMI. The composite index rose to 53.9, signalling expansion, with services, manufacturing and technology all improving. Economists said easing post-Budget uncertainty helped activity rebound, although hospitality remained under pressure from higher National Insurance and wage costs.

Why it matters: PMI rebounds often improve sentiment first, but cash flow typically lags, meaning SMEs should remain cautious about extending credit until stronger payment behaviour is visible.

However CBI warns of a disappointing outlook for private sector activity

The CBI says private-sector activity fell in the three months to January, with services, retail and manufacturing all reporting declines. Its survey also points to a weak outlook for the next three months, noting cautious businesses, down-trading households and fragile confidence.

Why it matters: When demand softens, customers stretch payment terms, so SMEs need tighter credit checks and faster escalation on overdue invoices.

Mortgage renewals set to shock households

Nearly 1m five-year fixed-rate mortgages taken out in 2021 are due to renew in 2026, with some households facing annual repayment rises of up to around £2,124. UK Finance also notes a larger cohort of households exiting fixed deals this year.

Why it matters: Household budget pressure often shows up as slower customer payments, more disputes, and higher default risk for SMEs selling on credit.

Retail sales climb 0.4% in December, but Q4 disappointed

ONS figures show retail sales rose 0.4% in December, helped by online jewellery, but volumes fell 0.3% across Q4. Commentators described the key profit quarter as weaker than hoped.

Why it matters: A softer retail backdrop tends to increase supplier exposure as retailers push for longer terms and delay settlement when trading is tight.

Bus routes hit by NI hike

Go-Ahead’s management has warned that rising National Insurance and inflation are making some London bus routes financially unsustainable.

Why it matters: Cost shocks in essential services can quickly ripple through supply chains, creating late-payment pressure for SMEs supplying transport, maintenance and fuel-adjacent services.

Commercial property demand remains strong, but London weaker

Rightmove data suggests commercial demand remains firm overall (with industrial demand stronger), but London saw a notable drop in demand, particularly offices.

Why it matters: Property and construction payment chains are vulnerable in mixed markets, so SMEs should watch credit exposure and be cautious on large, long-dated receivables.

Tax & Government

Banks could exploit a tax loophole in motor finance payouts

MPs have raised concerns that banks could use group structures to deduct compensation costs linked to the motor finance scandal, potentially costing the Exchequer around £2bn over two years, according to OBR estimates.

Why it matters: If policy choices appear to favour large institutions, SMEs should assume limited safety nets and focus on strengthening their own credit controls and recovery processes.

Replace business rates with a land tax

A policy proposal argues that business rates ultimately fall on landlords through rent adjustments, and that shifting responsibility to landlords (or replacing rates with a land-value tax) could reduce uncertainty and stop penalising property improvements.

Why it matters: Rates volatility makes planning harder and squeezes working capital, which can push SMEs into taking on riskier customers or tolerating late payers.

HMRC issues Making Tax Digital reminder (Income Tax)

HMRC has reiterated that from 6 April 2026, self-employed people and landlords with turnover above £50,000 will need to keep digital records and submit quarterly updates using compatible software. The rollout expands to £30,000 from April 2027 and £20,000 from April 2028.

Why it matters: Extra admin and software costs can create short-term disruption and cash-flow strain, which often shows up as slower payments to suppliers.

Taxpayers ‘blissfully unaware’ about MTD costs and impact

Commentators warn many affected taxpayers have had limited notice and may underestimate the cost of software, onboarding and ongoing reporting.

Why it matters: If customers are distracted by compliance changes, invoice processing slows and SMEs see longer debtor days.

More than 3m people yet to file tax returns

HMRC says millions still need to submit Self Assessment returns before the 31 January deadline to avoid penalties.

Why it matters: Late filings and penalty bills can reduce customers’ disposable cash, increasing the likelihood of delayed settlement on trade invoices.

Employment

Jobseekers face a tough year ahead

Reports highlight a tougher labour market in 2025, with unemployment at 5.1%, vacancies falling for months, and more jobseekers per vacancy. Recruiters and employers say the balance of power has shifted toward employers.

Why it matters: Softer demand and hiring caution typically mean slower cash coming into SMEs, so debtor management becomes more important than headline sales.

HSE sees surge in workplace injuries and work-related ill health

The HSE recorded a higher number of workplace incidents year-on-year, with stress and mental health issues remaining significant and an overall cost of ill health and injury estimated at £22.9bn.

Why it matters: Higher absence and safety costs can disrupt operations and invoicing, creating delays in billing and collections that hit SME cash flow.

Tech, AI and the modern workplace

Banks seek behavioural experts for ethical AI roles

Banks and finance firms are hiring behavioural science and psychology specialists to help govern ethical AI use, with a survey suggesting many firms plan to increase hiring focused on technology.

Why it matters: As larger firms automate faster, SMEs may face stricter onboarding, compliance checks and payment controls from customers, which can slow cash collection.

Grant Thornton advises graduates to avoid AI for applications

Grant Thornton’s CEO says AI-generated applications increase volume and reduce quality, prompting tighter recruitment processes.

Why it matters: Hiring friction can slow SME growth plans and increase operational pressure, making it riskier to carry large unpaid receivables.

AI ‘on the precipice’ of taking jobs

Business leaders continue to warn that AI could displace jobs rapidly, with debate intensifying about whether job creation will keep pace.

Why it matters: Disruption tends to produce uneven winners and losers, so SMEs should tighten credit limits and monitor customers more frequently.

City, investment and confidence

London listing interest increases

PwC suggests interest in listing in London has increased materially, helped by market rule reforms, with more firms considering UK floats than a year ago.

Why it matters: If capital markets improve, some sectors may stabilise, but SMEs should still manage credit risk because recoveries rarely flow evenly through supply chains.

City must act to maintain financial centre status

A report from TheCityUK and PwC calls for reforms across fintech, tax, trade, capital allocation and investor participation, arguing the sector needs to adapt to remain globally competitive.

Why it matters: Policy and regulatory shifts can change funding conditions quickly, and tighter credit availability can lead to slower payments from customers.

Business Secretary accused of ‘arrogance’ over investment stance

Political debate continues over a more activist government approach to investment and “picking winners,” with criticism from investors and opposition politicians.

Why it matters: Policy uncertainty tends to delay investment decisions, which often results in slower purchasing and extended payment terms for SME suppliers.

AI boss quits UK over tax hikes

A tech founder says higher taxes on business sales and a tougher climate are pushing entrepreneurs to relocate, despite strong UK engineering talent.

Why it matters: If founders and investment drift abroad, SMEs can face weaker domestic demand and slower-paying customers as growth slows.

Wealthy call for tax reform

A public letter from wealthy signatories calls for higher taxes on the ultra-rich, renewing the debate about how the UK raises revenue.

Why it matters: Tax policy debate can translate into changing consumer and business behaviour, so SMEs should keep cash reserves strong and credit risk under review.

Market Snapshot

Equities

• UK: FTSE 100 around 10,128 (down about 0.15%), pressured by sterling strength.
• Europe: Euro Stoxx 50 around 5,930 (down about 0.31%), with the DAX around 24,804 (down about 0.39%) and the CAC 40 around 8,111 (down about 0.39%).
• US: S&P 500 around 6,916 and Dow around 49,099 (both broadly flat), with investors positioning ahead of a heavy week of large-cap tech earnings.
• Asia: Japan’s Nikkei 225 around 52,885 (down about 1.79%) amid yen intervention speculation; Hong Kong’s Hang Seng around 26,766 (slightly higher).

Currencies (key rates for UK businesses)

• Pound vs dollar: GBP/USD around 1.367 (sterling stronger vs the dollar).
• Pound vs euro: EUR/GBP around 0.868 (sterling slightly stronger vs the euro).

Dollar weakness remains a key theme, with yen moves also influencing broader FX sentiment.

Commodities

• Gold: above $5,000/oz (around $5,081), extending a strong safe‑haven rally.
• Oil: broadly steady (Brent around $65.9; WTI around $61).
• Natural gas: sharply higher (around $6.21), linked to severe winter weather disrupting supply and boosting demand.

What it means

Markets remain defensive rather than euphoric: safe-haven demand is strong, FX volatility is notable, and growth expectations are still cautious. For UK SMEs, the practical takeaway is to assume customers may remain cautious, and to manage debtor exposure accordingly.

Insolvencies – Latest Notices

Administrations

• BEAUFORD VICTORIA LTD
• CAESR GROUP LTD
• FARWIG LTD
• JLP SURVEYING CONSULTANTS LTD
• LAZY JACKS YACHTWEAR LIMITED
• LESS TAX FOR LANDLORDS LIMITED
• MALIN + GOETZ LIMITED
• PAYMÁN HOLDINGS 2 LTD
• RUSSELL & BROMLEY LIMITED
• RUSSELL & BROMLEY ONLINE LTD
• TRADE TEAM RECRUITMENT LTD
• TRIBE TECHNOLOGY GROUP LTD
• TRIBE TECHNOLOGY HOLDINGS LTD

Liquidations

• ADAMJEE CREATION LTD
• ADVANCED VISION TECHNOLOGY LIMITED
• AR FINANCIAL ADVICE LIMITED
• ASCHER CONSULTING LIMITED
• ASSET INTEGRITY MANAGEMENT SOLUTIONS LIMITED
• AVENTAS MANUFACTURING GROUP HOLDCO LIMITED
• AVENTAS PROPERTY LIMITED
• B NOKES CONTRACTS LIMITED
• BNC CONTRACTS LIMITED
• BLUE IVY PROPERTY DEVELOPMENTS LTD
• BRAIN STORM TECHNICAL CONSULTANCY LTD
• CAHERLAG13 LTD
• CAMBIUM CONSULTING LIMITED
• CASSINI DEVELOPMENTS LIMITED
• CASTLE EPM LIMITED
• CONDICOTE INVESTMENTS LIMITED
• CRAIG EUROPEAN LIMITED
• CRONLAB LIMITED
• DAVID MALIK AND SON LIMITED
• FAIRMITRE (KIDDERMINSTER) LIMITED
• GILLETTE INDUSTRIES LIMITED
• GLQ INVESTORS LTD
• GORTMULLAN HOLDINGS LIMITED
• GREYSKIES LTD
• HBHM LIMITED
• HESYKHIA CONSULTING LTD
• HOLISTICOM LIMITED
• INVESCO PENSIONS LIMITED
• IT TRANSFORMATION MANAGEMENT LTD
• JONES, GILES & CLAY LIMITED
• KODEBOT LIMITED
• LARCOMBE CONSULTANCY LTD
• LJW CONSTRUCTION LTD
• LPS PLUMBING SOUTHEAST LTD
• LZS CONSULTING LIMITED
• MARKET GRAVITY LTD
• MAURICE HACKENBROCH & CO LIMITED
• MAVEN CAPITAL (MARLOW) LIMITED
• MICROMED ELECTRONICS LIMITED
• MIDRANGE DIRECT LIMITED
• NR94 LIMITED
• PPNL SPV B87 LIMITED
• PPNL SPV B87-1 LIMITED
• PORTNALL PROPERTIES LIMITED
• PW ANTELOPE UK LIMITED
• QUIRA LTD
• ROBSON ENGINEERING (COVENTRY) LIMITED
• SOLUTIONS 365 LTD
• SPRINGBANK (OXSHOTT) LIMITED
• SK LOW CONSULTING LTD
• STOVOLDS HILL FARMS LIMITED
• THE AGENCY COLLECTIVE LTD
• VERSISHULT LTD
• WAYSTONE CAPITAL SOLUTIONS (UK) LIMITED
• ZAGALETA LIMITED

Winding-up petitions / orders

• BEVINGTON DEVELOPMENTS LTD
• BRIGHT CAR SALES LTD
• DREAM CAR SALES LTD
• DW BUILDERS & CONTRACTORS LTD
• FIRE RATED SYSTEMS LTD
• GREENTOWN MANUFACTURING LIMITED
• HZ CUSTOMS UK LTD
• INTERNATIONAL MUSIC EVENT PRODUCTION LTD
• J.O ELECTRICAL DESIGN & INSTALLATION LTD
• MACSHOLDINGS LIMITED
• MEDIPROSPECTSAI LIMITED
• MULLANEY CONSTRUCTION & PROPERTY SERVICES LIMITED
• NEW CASTLE LTD
• PAYMÁN CLUB LTD
• PPH MOTORS LTD
• ROJIN LIMITED
• SABI CONVENIENCE STORE LTD
• THE ALCHEMY HEALTH CLINIC LTD
• TOLWORTH ASSOCIATES LTD
• CURLEY HILL MANOR LIMITED

What CPA can do for you

When growth is weak and customers are cautious, late payment is rarely an accident — it’s a cash-flow strategy for the debtor. CPA helps Members reduce exposure before invoices become problems, using CreditCare reports, monitoring and professional overdue account recovery that protects relationships while improving payment performance.

To discuss a customer, an overdue balance, or a more proactive monitoring approach, call Peter Uwins, CPA’s National Sales Manager, on️ 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.