Business news 27 April 2022

James Salmon, Operations Director.

Hundreds of millions dished out in Covid loans to dodgy firms. Inflation starting to pose a problem for people on “good wages”. Government borrowing halves as economy rebounds.  And more business news.

Hundreds of millions dished out in Covid loans to dodgy firms

An investigation by the Times has found that scores of companies supplied with Covid loans were formed after the first pandemic lockdown began, with many of those being “phoenix” companies born from the pre-pack administration of a struggling company.

At least £100m was lent to such firms, the paper claims. SMEs were able to borrow up to £5m from banks under the Coronavirus Business Interruption Loan scheme (CBIL). The taxpayer covered interest and fees for a year and guaranteed 80% of each loan.

Other cases identified by insolvency practitioners include a company director using a CBIL to pay a deposit on a personal residence and another where a CBIL was used to pay £380,000 to a company’s directors in salaries seven months before going insolvent.

Julie Palmer, a partner at Begbies Traynor, said: “We’ve heard of cases of the money being used to buy camper vans, new cars, Rolexes, and companies that should have been wound up getting a new lease of life just to tap the scheme before shutting down.”

A further £200m was given to companies created by “formation agents” at addresses where no actual business takes place.

The paper also reports on growing frustration at the lack of transparency from the Treasury regarding recipients of Rishi Sunak’s Eat Out to Help Out programme or the Future Fund scheme for technology start-ups, which dished out £1.14bn, while the British Business Bank has held back “borrower-specific data” arguing that increased transparency could lead to greater fraud.

Meanwhile, the FT reports that MPs on the Public Accounts Committee found officials had no plans in place to recover debt after lenders have pursued borrowers for up to a year for outstanding loans and called for a strategy for collecting overdue payments.

Inflation starting to pose a problem for people on “good wages”

A new study by Kantar reveals that food prices are 5.9% higher than they were a year ago, marking the sharpest increase since December 2011. The figures indicate that the average yearly food bill could increase by £271. The rising prices are impacting sales, with supermarkets witnessing a 4.1% fall in grocery sales in the last four weeks while online grocery sales have fallen by 15% compared with last year.

While James Heappey, the armed forces minister, admitted that “the cost of living is getting to such a point now where even people on good wages are struggling to make ends meet,” Labour repeated its call for an emergency budget to tackle the cost-of-living crisis. The figures prompted Boris Johnson to back a proposal to unilaterally cut tariffs on food imports, the FT reports, but the international trade secretary Anne-Marie Trevelyan warned the move could lose Britain leverage in trade negotiations.

Government borrowing halves as economy rebounds

Government borrowing more than halved from the £317.6bn in 2020-21 to £151.8bn in the last financial year.

The figure is well above the £127.8bn forecast by the Office for Budget Responsibility (OBR) last month, driven up by 30-year high levels of inflation.

Interest payments on debt more than doubled last year from £30.5bn to £69.9bn. Borrowing in March came in at £18.1bn, the second-highest amount for the month since records began in 1993, but £8.8bn less than the amount borrowed in March 2021.

Michal Stelmach, senior economist at KPMG UK, said it was “quite remarkable” that borrowing had halved in the time it had “considering it took five years following the global financial crisis for that to happen.”

The Office for National Statistics said the Government received much stronger than expected revenues from taxes, with receipts coming in at £619.9bn, an increase of £94.3bn. In response to the data, the OBR said the strength in revenues was “broad based with all the major taxes recovering strongly” and the improvement had continued even as the wider economic recovery took a hit from higher energy prices.

Chancellor Rishi Sunak said: “Public debt is at the highest levels since the 1960s and rising inflation is pushing up our debt interest costs, which mean we must manage public finances sustainably to avoid saddling future generations with further debt.”


Lloyds Banking saw its first quarter profit dip and noted the outlook for the UK economy “remains uncertain”, though upgraded guidance. Underlying net interest income for the first quarter of 2022 rose 10% to £2.95 billion, with total net income for the period up 12% to £4.11 billion. Despite this increase, pretax profit fell 14% to £1.62 billion, with Lloyds’s profit hit by a £177 million underlying impairment versus a net credit of £360 million a year before.


GlaxoSmithKline has reiterated its growth outlook after posting first quarter sales of £9.8bn, surpassing analysts’ expectations. The pharma giant said it anticipated it would deliver sales growth in 2022 of between five to seven per cent at Constant exchange rates (CER) and growth of adjusted operating profit of between 12 to 14 per cent at CER. Its guidance was excluding any contribution from Covid-19 solutions.


Russia’s state controlled Gas supplier has announced it is cutting off gas supplies to Poland and Bulgaria from Wednesday, after they refused to pay for the gas in rubles.


Tesla shares dropped 12% as markets reacted to Elon Musk buying Twitter, with much of the funding secured against Musk’s Tesla holding.


Heathrow Airport announced yesterday it was raising its passenger forecasts for 2022 despite pandemic-related losses swelling to £4bn. The London hub’s forecast increased to 65 per cent of pre-pandemic levels, going up from 45.5m to 52.8m due to a peak in passenger demand over the summer.


Gold Prices rose on Tuesday as investors sought the safe-haven asset amid fears over global growth and soaring inflation, though bets of aggressive US interest rate hikes kept bullion pinned near four-week lows hit in the previous session.

Fines waived for millions caught up in HMRC trust clampdown

A rule brought into force in October 2020 to require all so-called “express” trusts to be registered with HMRC will catch out more than a million people who have carried out basic estate planning, experts from Canada Life estimate. Previously only trusts which paid tax had to be registered. They were told to declare their affairs by September or face fines, but HMRC has been forced to announce a grace period after it emerged just 150,000 people have declared their affairs since 2017, when the trust register was first launched. Lawyers say this is because many people are simply unaware their assets are even involved in a trust, or they’ve not been informed of the new rules. An HMRC spokesman said: “The requirement to register with the Trust Registration Service is a new one for many trustees, and we anticipate some trustees will remain unaware of the obligation to register once the deadline has passed. Penalties for not registering or late registration will only be charged where it can be shown the failure was deliberate.”

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.

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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 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 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!

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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.