Business news 30 January 2024
Tax office sees record late payment interest. Shop price inflation slows to weakest pace in two years. Job vacancies fall at fastest rate since 2020. Interest rates, data breaches, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Tax office sees record late payment interest
HMRC pulled in a record £346m in interest from taxpayers who made late payments in the year to October 2023, according to analysis by RSM. The total rose by £159m the year earlier. Data from AJ Bell shows that 1.4m taxpayers made late payments in the tax year 2020/21. Assuming this figure has stayed consistent, taxpayers who paid their bill late were charged an average of £247 each in interest last year and £456 over the past three years. HMRC last week announced that almost 45,000 people had set up a repayment plan since April 2023 as they could not afford their tax bill.
Shop price inflation slows to weakest pace in two years
Shop price inflation in the UK has slowed to its weakest pace in nearly two years, according to the British Retail Consortium and NielsenIQ’s shop price index. The index dropped to 2.9% in the year to January, down from 4.3% the previous month. This suggests that the official CPI inflation estimate for January will fall from 4% in December. Food inflation also slowed to 6.1% this month, the lowest since June 2022, while price growth for non-food goods eased to 1.3%. However, rising shipping costs could keep inflation above the Bank of England’s 2% target. The Bank is expected to leave the UK base rate unchanged at 5.25% but may consider rate reductions later this year. Yael Selfin, chief economist at KPMG UK, said that receding price pressures in the first few months of 2024 would give the Bank “ample room to start cutting policy rates in a few months’ time.”
Bank of England set to hold rates at 5.25%
The Bank of England is expected to keep interest rates at 5.25% when its Monetary Policy Committee (MPC) meets on Thursday. Analysts from Deutsche Bank expect all nine members of the MPC to vote to hold the base rate steady, while Capital Economics and Oxford Economics have also predicted that rate cuts will not come until later in the year. With experts noting that the MPC is likely to wait until inflation is lower to reduce rates, Allan Monks, UK economist at JPMorgan, commented: “The Bank’s updated narrative is likely to be that clear progress is being made on inflation, but that it is too early to declare victory.” Martin Beck, chief economic advisor to the EY Item Club, commented: “A change in the outlook for inflation since the MPC met last in December should prompt an adjustment in the Committee’s tone at its February meeting.”
Job vacancies fall at fastest rate since 2020
Job vacancies are falling at the fastest pace since June 2020, according to employment search engine Adzuna. Vacancies fell by 6.95% to 929,138 in December compared to November and are forecast to fall by a further 6% to 8% in January. Year-on-year, vacancies were down 13% on December 2022. The report says competition for jobs is the highest it has been since September 2021, with 1.68 jobseekers per vacancy. The data also shows that average advertised salaries are climbing, having increased by 0.96% to £37,577 in December. Andrew Hunter, co-founder of Adzuna, said vacancies are “expected to drop further before they begin picking up.” Tony Wilson, director at the Institute for Employment Studies, commented: “Hiring is slowing down, but this data suggests that there’s been little if any rebound in activity in the new year.” He added: “Ordinarily, we would expect quite a strong bounce back in recruitment after Christmas.”
Small firms call for transparency over standing charges
The Federation of Small Businesses (FSB) has warned that small firms are being hit by steep increases in standing charges on their energy bills, accusing suppliers of hiking rates “as a way to inflate bills.” FSB national chair Martin McTague said: “Energy suppliers have some explaining to do on the sudden and dramatic hikes in standing charges, which become a regressive form of billing that hamper small business growth, confidence, and investment.” He added: “Even now that the wholesale energy prices have come down from the peak we saw in 2022, small businesses are still scratching their head over skyrocketing bills.” He said the FSB is calling for greater transparency from suppliers on how they calculate the fixed fees “to ensure market competition and, most importantly, to enable small business customers to understand clearly what they are paying for.”
Financial data from 53m people involved in data breaches
Analysis from insurance group Chaucer shows that financial data belonging to nearly 53m individuals was compromised in data breaches in 2023. The report found that there was a 90% increase in financial data being involved in cyber-attacks in 2023 compared to 2022. Data from the Information Commissioner’s Office also reveals an increase in successful cyber-attacks against financial services providers, with the total climbing from 259 in 2021/22 to 722 in 2022/23. Ben Marsh, deputy class underwriter at Chaucer, described the amount of sensitive data involved in attacks as “very concerning.” He noted that businesses are often retaining sensitive data that they have no use for, “needlessly creating additional risks for them in the case of a data breach.”
The number of green SMEs has doubled
The number of UK SMEs that have “gone green” doubled last year, according to Aldermore’s Green SME Index. The report shows that 489,000 UK businesses have formally committed to reaching sustainability by the Government’s net zero deadline of 2050, up from 220,000 at the beginning of 2023. While 489,000 small and medium-sized businesses have formally committed, the index shows that, in total, 2m are working toward net zero. John Carter, commercial director for commercial real estate at Aldermore, said SMEs face several challenges, “such as supply chain issues, interest rates, access to skills and labour, and increased regulation for UK-EU trade.” He added: “SMEs make up the majority of private sector businesses in the UK and as such, they will always be at the heart of our national transition to net zero.”
Tourist tax puts off 2m visitors
The removal of tax-free shopping for foreign visitors is deterring 2m tourists a year from visiting the UK and costing £11.1bn in lost GDP, according to analysis by the Centre for Economics and Business Research (CEBR). The report suggests that the wider loss to the UK economy of closing the tax perk is £2.5bn more than any gain in VAT revenues. The CEBR calculates that visitor numbers would have been 589,000 higher in Q3 2023 if a rebate scheme had been in effect, while expenditure would have been about £1.3bn higher. Across the year, visitor numbers could have been 2m higher, with a £4bn increase in spending and a GDP boost of £11.1bn.
EY monitors office attendance
EY is reviewing swipe-card entry data to monitor office attendance and ensure employees are sticking to a hybrid working policy which requires office attendance at least two days a week. The data will be used to crack down on individuals who fail to meet the minimum in-office requirements.
Superdry looks to cut costs
Superdry is considering significant cost cutting as it contends with a slump in sales. The fashion retailer is drawing up plans for potential store closures and job cuts, having seen sales fall by nearly a quarter in the six months to October. The firm has told investors it is exploring “the feasibility of various material cost saving options.” This follows reports that it is working with advisers at PwC on a plan which could lead to company voluntary arrangement or another form of restructuring.
Diageo
Diageo has reported its half-year numbers, posting a drop in half-year revenue and operating profit reflecting a 23% decline in Latin America & Caribbean (LAC) sales. The owner Guinness, Johnnie Walker and Smirnoff said sales in the half-year ended December fell 1.4% to $11.0 billion, with organic sales down 0.6%, driven by a 23% decline in LAC. Reported operating profit in the half-year declined 11.1% to $3.3 billion, due to lower organic operating margin and a negative impact from exceptional operating items.
Natwest.
The government has asked brokers to pitch to liquidate the governments holding.
Neuralink
Elon Musk said that the first human patient has received a brain implant (called Telepathy) from Neuralink and is recovering well with “promising” initial results in a significant step forward for the company that aims to one day let humans control computers with their minds.
Amazon
Amazon on Monday said it was scrapping its plans to buy the iRobot vacuum maker after the EU’s antitrust authority objected to the plan over competition concerns. “We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and General Counsel. Reports last week suggested the takeover was set to be blocked by the EU’s competition watchdog.
Lloyds
Lloyds Banking is shutting down its mobile banking service this year, after it last week revealed plans to shed 1,600 jobs across its branch network. The banking company has been informing staff and customers of plans to scrap the Lloyds Bank and Bank of Scotland mobile branches in May.
HSBC fined £57m
HSBC has been handed a £57.4 million fine by the PRA for “serious failings” in protecting some depositors
Markets
Europe’s Stoxx 600 crept to a new two-year high as media and travel and leisure stocks led the rise. There was another record close on Wall Street, stretching the S&P 500’s gains this month to 3.3%. The Nasdaq 100 has surged 4.6%. The S&P was up 1.76% yesterday and the Nasdaq 1.12%. Stocks in Asia meanwhile slipped, led by declines in China amid growing pressure to cut rates further to stabalise the economy. Brent crude is at $82.4 and the pound is at $1.268 and €1.169
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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.