Business news 31 January 2025
The Small Business Commissioner and late payments. Small businesses vulnerable to cyber threats. UK business confidence falls further. BoE poised for interest rate cut, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
The Small Business Commissioner and late payments
Liz Barclay, the Small Business Commissioner, in her latest newsletter stated her simple wishes for 2025:
- That business customers will pay their suppliers by the agreed date. That allows suppliers certainty as to when money will arrive in their bank accounts so they can plan their cashflow accordingly.
- That firms will pay suppliers quicker. If you pay suppliers in 90 days that means you’re asking them to wait 3 months for their money and they will often have had a significant financial outlay in processing your order. Pay them quicker and they can get on with the next order and possibly invest in training and better equipment which will benefit you with improved products and services.
- That both parties will see the benefit of negotiating payment terms that suit everyone rather than the bigger customer imposing their will on the smaller supplier. That improves working relationships and engenders loyalty.
- That firms will agree to put in writing their terms of trading so that everyone knows how they will work together and what’s expected of whom. There’s less chance of a dispute.
- That investors will see that firms that that do all of the above and treat their suppliers well are likely to treat employees and customers well too. That enhances reputations all round.
These are wishes, we at CPA wholeheartedly endorse!
If you struggle with late payers, 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.
Small businesses vulnerable to cyber threats
Small and medium-sized enterprises (SMEs) in the UK are increasingly vulnerable to cyber attacks, as many believe they are too small to be targeted. According to the Association of Business Insurers (ABI) report, some 50% of UK businesses experience some form of cyber breach. It suggests that without adequate protection, SMEs face heightened risks from cyber threats, which are likely to escalate as technology becomes more complex. The report, conducted in partnership with Grant Thornton, recommends increased awareness and investment in cyber insurance to bolster security and stabilise the UK economy.
UK business confidence falls further
British businesses exhibited increased pessimism in January, marking five consecutive months of declining corporate confidence. The Lloyds Bank Business Barometer fell by two points to 37%, its lowest level in a year, following a £25bn tax increase announced in October. The survey, conducted with 1,200 companies, indicates a slight weakening in hiring plans and the lowest price increase intentions in five months.
BoE poised for interest rate cut
The Bank of England (BoE) is expected to reduce its benchmark interest rate from 4.75% to 4.5% on February 6, as the UK economy shows signs of stagnation. Economists surveyed by Reuters unanimously predict this cut, with a nearly 90% chance of it occurring. Philip Shaw, chief economist at Investec, said weak economic growth meant companies would find it harder to push the cost of tax hikes on to consumers. “That should make it easier for the Bank of England to look through a near-term rise in inflation and deliver more rate cuts than currently priced in.”
Markets
Yesterday, the FTSE 100 closed up 1.04% at a fresh high of 8646.88. The Euro Stoxx 50 closed up 0.99% at 5282.21 after the ECB cut rates by 0.25% to 2.75%.
US Economic Growth slowed a bit more than expected in the final three months of 2024, the Commerce Department reported Thursday. Gross domestic product, a measure of all the goods and services produced across the sprawling US economy during the period, showed that the economy accelerated at a 2.3% annualized inflation-adjusted pace in the fourth quarter. Economists had been expecting an increase of 2.5% after growth of 3.1% in the third quarter
Apple reported better-than-expected results for the last quarter of 2024. The phonemaker’s revenues increased by 4% year on year to $124 billion, despite lower iPhone sales in China. Profit increased by 7% to $36 billion.
Overnight in the US the S&P 500 rose 0.53% to 6071.17 and the NASDAQ rose 0.25% to 19681.75.
This morning on currencies, the pound is currently worth $1.241 and €1.195. On Commodities, Oil (Brent) is at $76.6 & Gold is at $2797. On the stock markets, the FTSE 100 is currently up 0.34% at 8676 and the Eurostoxx 50 is up 0.43% at 5305.
UK data
UK regulators are reportedly investigating more surveys conducted by the statistics office to determine whether they face problems similar to its labour market data.
Tariffs
Donald Trump is set to let go his first wave of tariffs tomorrow, with allies Canada and Mexico first to be targeted. The precise nature of the tariffs remains unclear though the president vowed yesterday to follow through by his self-imposed 1st February deadline. He suggested he may exclude oil imports from the 25% tariffs he plans to impose on Canada and Mexico.
Independent breweries hit record turnover
The UK’s top 25 independent breweries achieved a record turnover of £1.72bn last year, marking a 9% increase from £1.57bn in 2023, according to UHY Hacker Young. BrewDog led the way with sales of £281m, an 11% rise from £253m the previous year. A spokesperson from UHY Hacker Young stated: “The success of these breweries has been driven by a bounceback in consumer demand for independent and locally sourced goods after the Covid pandemic.” This resurgence highlights the growing preference for local products among consumers.
Deepseek
US officials are probing whether DeepSeek dodged export curbs on advanced Nvidia chips by buying them through third parties in Singapore.
Deadline looms: Millions risk fines
With the self-assessment tax return deadline approaching, over 3m individuals risk incurring a £100 penalty for late submissions, HMRC has warned. Myrtle Lloyd, HMRC’s customer services director, stated: “Customers’ reasons for not paying their tax bill or arranging a payment plan by the deadline will be considered individually.” New regulations require online platforms like eBay and Vinted to share sales data for sellers with over 30 transactions. Those who miss the deadline face escalating penalties, including daily fines of £10 after three months. Reasonable excuses for late submissions include illness and technical issues. HMRC also cautions against scams during this period, urging taxpayers to protect their login details.
House prices
UK House Price Growth softened at the start of the year, a tracker from mortgage lender Nationwide showed. UK house prices rose 4.1% on-year this month, easing from a 4.7% climb in December, according to Nationwide. The average price edged up 0.1% in January from December, to sit at £268,213. In December, prices rose 0.7% on-month. Nationwide analyst Robert Gardner commented: “The housing market continues to show resilience despite ongoing affordability pressures.”
Reeves could target gifting allowance in Spring Statement
Chancellor Rachel Reeves is considering changes to the gifting allowance in her Spring Statement, with wealth advisers warning that the seven-year rule is “under threat.” This rule currently allows individuals to pass down money or assets tax-free up to seven years before death. Nimesh Shah, chief executive of Blick Rothenberg, said: “Inheritance tax and gifting has been brought to the forefront of conversations [with clients].” Concerns have arisen that the Government may extend the rule to ten years or abolish it entirely to increase revenue.
Smiths Group break up
Smiths Group said it will look to sell its electronic connectors and separate is threat detection arm as it looks to “unlock significant value and enhance returns to shareholders”. The engineering firm said Smiths Interconnect is to be divested, and then Smiths Detection will be separated either by UK demerger or sale. Smiths is targeting an announcement by the end of the calendar year in regard to an Interconnect sale. “Capitalising on our strong financial and operational momentum, we will now simplify the group to focus on high performance industrial technologies for efficient flow and heat management. These technologies are delivered by our world-class John Crane and Flex-Tek businesses, which serve attractive energy and industrial end markets and are set to deliver continued growth and margin expansion,” Smiths said.
Baker Tilly’s revenue soars globally
Baker Tilly International reported a global revenue increase of 9% for the year ending 31 December 2024, reaching $5.62bn (£4.5bn). The legal services division was the primary driver of this growth, with a remarkable 17% rise. The advisory group also performed well, growing by 16%, while tax and assurance services saw increases of 11% and 5%, respectively. The EMEA region led growth at 13%, with notable performances in Canada, France, Germany, Malaysia, and the UK, where MHA reported a 32% revenue increase. Despite a slight decline in Latin America in US dollar terms, local currency growth was 18%.
Sage reports strong revenue growth
The Sage Group has reported a 10% increase in underlying revenue for the first quarter, reaching £612m, driven by strong demand, particularly in North America. The accountancy software giant has heavily invested in cloud services and is now focusing on the growing demand for artificial intelligence products to enhance its offerings for small business owners.
IFA steers clear of mandating DEI behaviour
The Institute and Faculty of Actuaries has dropped a proposal to require its members to “encourage diversity, equity, and inclusion” after a consultation found mandating DEI demands into its code of conduct was not necessary. The body also said it would not implement separate DEI guidance, instead tweaking its current codes of conduct barring harassment and bullying.
Mortgage approvals rise ahead of stamp duty hike
Mortgage approvals for home buyers rose slightly in December, according to the Bank of England, reaching 66,526, up from 66,061 the previous month. Experts suggested that many people are likely to have been working with urgency to get their mortgages approved to help ensure they can complete ahead of stamp duty threshold increases. Karim Haji from KPMG highlighted that consumer confidence remained low due to economic uncertainty, urging lenders to support households facing financial challenges.
DfE to curb higher education franchise fraud
The Department for Education is set to implement reforms aimed at curbing rogue operators offering substandard courses linked to English universities, following a National Audit Office report revealing that fraudulent providers cost taxpayers £2m in 2022-23. Under the proposed changes, course operators with over 300 students must register with the Office for Students to ensure compliance with quality standards, or risk fines and suspension. The report highlighted that 53% of the £4.1m fraud detected by the Student Loans Company involved franchised providers, despite them accounting for only 6.5% of loan-funded students.
Homebase collapsed owing more than £650m
Documents filed with Companies House reveal that Homebase collapsed into administration owing more than £650m to unsecured creditors, while £100m was owed to trade creditors. Jonathan De Mello, an independent retail analyst, remarked: “The huge level of debt Homebase accrued over the years is an all too familiar story.” He added: “Fault does lie on both sides to an extent, however, as while it was indeed irresponsible of Homebase to take on so much debt given its extremely precarious financial position at the time, creditors do need to ensure that they do their due diligence before lending or providing products to any business, and the signs were there for all to see over the years that Homebase was in trouble and needed to urgently restructure.”
Birmingham Council’s financial crisis revealed
Birmingham City Council declared itself bankrupt after struggling with issues including a failed IT system and inadequate housing services, a “jaw-droppingly bad” report by auditors Grant Thornton has revealed. The report also pointed to significant failings in services for children with special educational needs and serious mismanagement in waste services, leading to equal pay liabilities. “Ultimately, the lack of timely information on the severity and implications of the emerging issues has hampered the ability of senior management and members to intervene effectively,” the report read. “This appears to have been made worse by a culture in the organisation of not reporting or being receptive to bad news, an over-emphasis on protecting personal reputations and a lack of challenge and rigour in governance.” Councillors at an audit committee said they were “shocked and “ashamed” by the report.
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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.