Business news 26 November 2021
James Salmon, Operations Director.
Small businesses primed to drive UK economic recovery. Shoppers geared up for Black Friday. New Covid variant. Orbit Energy & Entice Energy become latest providers to go bust. And more business news.
Small businesses primed to drive UK economic recovery
Research by accounting firm Xero indicates that Britain’s small businesses are set to heave the country out of the economic quagmire, with the firm’s small business index climbing to a 19-month high last month, hitting 95 points. Glen Foster, director of small business and accounting partners at Xero, said: “It’s encouraging to see positive signs of small recovery, with wages and jobs moving in the right direction and beginning to reflect the resurgence of the economy.”
Shoppers geared up for Black Friday
A survey by EY has found interest from shoppers in Black Friday was “significantly higher than last year” with reports of supply chain challenges and product shortages apparently “encouraging consumers to bring forward purchases”. Some 45% of consumers intend to hit the high street or shop online for this year’s event, a big rise on the 38% last year. Estimates on spending vary, with one study putting the figure at £9bn and another suggesting it will hit a record £12bn. Separately, KPMG’s James Stewart says: “With the rapid expansion of online sales over the past two years of lockdowns, Black Friday has become the ‘New Christmas’.” However, KPMG warns consumers are set to face higher prices for goods, with a survey finding 70% of businesses in the retail and hospitality sectors reporting that supply chain issues will increase their costs.
New Covid variant
Markets for travel companies and airlines are braced for tumble amid a ban on flights from some African countries following the discovery of a new Covid variant called B.1.1.529 in South Africa. From midday, flights from South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini into the UK will be banned until 04:00 GMT on Sunday. Stock markets across the world are falling on fears that the new Covid strain could damage the economic recovery. Oil Prices slid nearly 4% to below $80 a barrel.
South Africa said the decision by the UK to ban all flights from South Africa over a new variant of C-19 seemed “rushed”.
UK Health Secretary Sajid Javid said scientists were “deeply concerned” about the new Covid variant but more needed to be learned about it. However, he said the variant had a significant number of mutations, “perhaps double the number of mutations that we have seen in the Delta variant”.
Orbit Energy & Entice Energy become latest providers to go bust
Orbit Energy has stopped trading as the ongoing energy price crisis continues to send firms out of business. Orbit has about 65,000 customers and another, smaller firm with 5,400 customers called Entice Energy, has also gone under. Ofgem said new suppliers would be found for the two companies’ customers. Price Bailey have looked into the credit risks of all energy firms still trading and registered with Ofgem. Earlier this week it was reported that 11 companies were on the brink of failure.
London hotels report strong festive bookings
Data analysed by RSM show London hotels are still lagging behind in their Covid recovery compared to rivals elsewhere – but have reported strong festive bookings. The capital’s occupancy rates were 26% behind pre-pandemic levels last month, as the sector continues to suffer from the slow return of international tourists and business travellers. Chris Tate, head of hotels and accommodation at RSM, said the sector’s recovery was being held back by a shortage of staff and difficulties with supply chains. He added: “These challenges, together with energy price increases, are eroding the bottom line at a time when operators are desperate to rebuild their balance sheets.”
Tax administration law needs a total overhaul
Writing in City AM, Susan Cattell, Head of Tax Technical Policy at ICAS, describes how tax law is not neatly packaged into an amended Taxes Management Act 1970 (TMA), but spread over numerous Finance Acts and various regulations too. Moreover, TMA has missed out on an effort to make tax legislation clearer and easier for taxpayers to understand and has also not kept up with technological developments and with new approaches to tax. Cattell reminds readers that ICAS has called for TMA to be rewritten in a user-friendly style, consolidated so that all the main provisions are in one place, and brought up to date for technological and other developments since 1970. “A modern tax administration system cannot be based on the shaky foundations of a 20th century act which is no longer fit for purpose and needs to be regularly patched up in response to 21st century challenges.”
Push Doctor nears administration amid sale talks
Digital GP advice platform Push Doctor is in talks with privately owned Square Health about a sale that could be implemented through a pre-pack administration. City sources said BDO has been advising on funding options.
Buy-to-let rules overhauled to attract pensioners
Mortgage lenders have eased rules which had prevented many retirees from investing in buy-to-let properties. Accord Mortgages, part of Yorkshire Building Society, has dropped its minimum income requirement for buy-to-let customers. Previously, applicants had to earn a minimum of £25,000 to qualify for a loan. Chris Sykes, of mortgage broker Private Finance, said: “It is a welcome change for many. Those who treat buy-to-lets as their pension wouldn’t qualify for finance through Accord previously but would now.”
Allica Bank raises £110m to accelerate growth
The specialist small business lender Allica Bank has tapped investors for £110m, taking the amount it has raised to £233m in the past two years. US-based fintech investor Atalaya Capital Management was brought on board in this round. Atalaya recently took part in a £450m funding round for Capital on Tap, also an SME lender, alongside BNP and HSBC. “While most digital and challenger banks are focused on specialist lending markets or secondary payment accounts, this transaction demonstrates how Allica is leading the charge in taking on the mainstream high street banking market for established, growing small and medium-sized businesses,” Richard Davies, Allica’s chief executive, said.
Trio jailed for £1.5m tobacco scam
The men, from London, Nottingham and Poland, orchestrated the delivery and sale of counterfeit cigarettes worth more than £1.5m in unpaid duty, an investigation by HMRC revealed.
Brexit
According to reports the Government will continue negotiating with the European Union over Northern Ireland because it considers progress is being made. This marks the latest sign that a further breakdown in post-Brexit relations with the bloc is not imminent. Britain will not suspend the Brexit deal relating to Northern Ireland for as long as talks with the EU remain constructive.
US/China
The US Government has added a dozen more Chinese companies to its restricted trade list, citing national security and foreign policy concerns. Washington says that some of the firms are helping develop the Chinese military’s quantum computing programme. This latest move comes as tensions grow between the US and China over the status of Taiwan.
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