The Chancellors Summer Statement – business news 9 July 2020.

9 July 2020.

James Salmon, Operations Director.

We cover the chancellors summer statement, reaction, news for SMEs, the latest on Covid-19 and the markets and lots more.

Here are CPA we want to  share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.

Covid-19 general news

Global covid-19 cases topped 12 million, with spikes all over the world. Deaths exceed 546,000.

President Donald Trump complained that school-reopening guidelines set by the Centres for Disease Control and Prevention are too stringent, and threatened to cut funds to schools that stay shuttered. However little sign that America is bringing covid-19 under control. Some 60,000 new cases were recorded on Tuesday in the US — yet another daily record — taking the total above 3 million. Over 132,000 Americans have died of the disease.

California reported 11,694 new virus cases, its largest one-day increase and above the seven-day average of 8,116 daily infections.

South Africa is likely to run out of intensive-care unit beds within four weeks, Health Minister Zweli Mkhize told parliament.



The FTSE 100 ended down 0.5% after going up and down all day. The 250 dropped 1%. European indexes were down over 1%. Markets were initially concerned over potential punitive measures by the US government against HSBC over Hong Kong. There was however positive reaction to the Chancellors statement.

Rishi Sunak announced a series of measures to boost key sectors of the economy. The most significant measure is a jobs retention bonus scheme that will pay employers £1,000 per furloughed employee still on the payroll in January 2021. The Chancellor has also raised the stamp duty threshold to £500,000 from £125,000 until 31 March 2021 and unveiled a “Kickstart” scheme that will pay employers to create jobs for 16-24 year olds. He also announced £10 per head voucher incentives for dining out during August and a cut in VAT on food, hospitality and tourism sectors to 5% from 20%. Almost £2bn has also been allocated towards a “Green Homes Grant” which effectively subsidises the adoption of clean energy systems and home improvements.
Rishi Sunak promises £30bn to supercharge economy and save jobs

In his summer statement, Chancellor Rishi Sunak said that the government will cut VAT on hospitality, introduce a stamp duty holiday, and spend up to £9bn rewarding employers that bring back furloughed staff, as part of a £30bn plan to prevent mass unemployment.

VAT on food, accommodation and attractions will be cut from 20% to 5% next Wednesday; it will apply to eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, attractions like cinemas, theme parks and zoos.

He also introduced the “Eat Out to Help Out” plan, which he said would help protect 1.8m jobs, at cost of £0.5bn. Meals eaten at any participating business, Monday to Wednesday, will be 50% off in August, up to a maximum discount of £10 per head for everyone, including children.

An immediate stamp duty holiday for homes sold for up to £500,000 in England and Northern Ireland, until 31 March, was also announced, as was a £1,000 bonus for employers for each one of the 9.4m staff furloughed since March that return to work.

A £2.1bn “Kickstart Scheme” will subsidise six-month work placements for people on Universal Credit aged between 16 and 24, who are at risk of long-term unemployment. The Institute for Employment Studies praised the statement, describing the detail of Mr Sunak’s speech as akin to “a how-to kit for dealing with consequences of a big recession”.

Company directors overlooked in Sunak’s mini-Budget

The Institute of Directors (IoD) have said that small businesses have been overlooked in the Chancellor’s latest stimulus package with no help forthcoming for company directors, who have not been able to receive income support during the pandemic.

Jonathan Geldart, of the IoD, said: “A glaring omission throughout this pandemic has been the exclusion of small company directors, many of whom have not been able to access income support. Widening grant schemes could help those who have been left struggling without assistance, and help more firms to re-open.”

Mike Cherry, chairman of the Federation of Small Businesses, agreed while Gina Broadhurst, of the #ForgottenLtd Campaign for small company directors, added: “The Government’s strategy is premised on businesses remaining solvent, but hundreds of thousands of small business owners employing millions of people have received zero support and are on the verge of collapse.

At this rate more businesses will fall, never to be seen again.” Additionally, Andy Chamberlain, of the Association of Independent Professionals and the Self-Employed, said freelancers were “noticeable by their absence” in Rishi Sunak’s statement. He urged the Chancellor to introduce a tapered end to the Self-Employment Income Support Scheme as well as the furlough scheme.

Chancellor warned his job boosting package may fall flat

Unions have said Rishi Sunak’s economic statement yesterday did not go far enough to save jobs with Unite’s Len McCluskey warning that: “Redundancy notices are already flying around like confetti.” He went on to say that with the end of the job retention scheme in October now confirmed the flood of job losses would “surely only gather pace.”

Garry Young, a deputy director of the National Institute for Economic and Social Research, agreed this could “precipitate a rapid increase in unemployment” as the incentives offered to employers “look too small to be effective” and employers will now be reluctant to continue to top up the wages of furloughed workers.

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, backed this assessment as did Clare McNeil, associate director at the Institute for Public Policy Research, who described the bonus a s a “halfway house reform – not a proper wage subsidy”. The Chancellor pledged to pay firms £1,000 for each worker they bring back from furlough. It will cost £9bn if the 9m individuals currently furloughed return to work.

Dame Carolyn Fairbairn, director general of the CBI, said: “The job retention bonus will help firms protect jobs, but with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.”

Stamp duty cut welcomed

Rishi Sunak has confirmed that the threshold for paying stamp duty will be raised from £125,000 to £500,000 immediately in a bid to help the UK housing market out of the coronavirus lockdown. The Chancellor said the stamp duty holiday, which will run to March 31 next year, will result in an average saving of £4,500 and will benefit nine in 10 house buyers. John Tonkiss, chief executive of housebuilder McCarthy and Stone, said the move is a “no brainer to reinvigorate the economy,” while according to Jonathan Evans, real estate director at Deloitte, based on the average price of a home in England, a purchaser can now expect to save almost £2,500 by not paying stamp duty. In addition, Evans notes, the average property in London (£485,000) will also be exempt and save £14,200. But Tim Stovold, head of tax at Moore Kingston Smith, said it was a blow for first-time buyers, who would find themselves “competing in a market full of landlords keen to cash in.”

UK public borrowing to exceed £350bn with Sunak’s stimulus plan

The Chancellor’s £30bn stimulus plan to heave Britain out of recession brings the Government’s crisis spending to £188bn and public borrowing to over £350bn this financial year. The FTSE 100 fell 11.50 points following Rishi Sunak’s statement and closed 29 points, or 0.5% down at 6,160.

Tourism and hospitality firms welcome VAT boost

The hospitality industry has welcomed Rishi Sunak’s announcement that tourism and hospitality VAT will be cut from 20% to 5% for the next six months. Plans to give people a 50% discount, up to £10 per head, to eat out in restaurants in August were also well received. Russell Nathan, senior partner at HW Fisher, said: “Our restaurants, pubs, shops and hotels are struggling. This is a timely announcement from Government as businesses are in desperate need of a clear action plan.” However, the CBI and lobby group UKHospitality point out that capacity has been slashed dramatically due to social distancing rules, leaving firms keen to make up the shortfall. Russell Lynch suggests in the Telegraph that this could be partly achieved by increasing the cost of meals “to reflect the Government’s £10 a head largesse.” Meanwhile, Alison Horner, indirect tax partner at MHA MacIntyre Hudson, said premises serving alcohol would have to reprogramme their tills to deal with three different VAT rates: alcohol at 20%, zero-rated cold takeaway foo d and 5% for everything else. Finally, retailers lamented the fact that the VAT cut had not been extended to shops with Helen Dickinson of the British Retail Consortium describing it as a “missed opportunity”. The aerospace and motor industries also warned that a lack of targeted support for manufacturers could cost jobs.

Labour now not calling for tax rises

The Labour Party has dropped its demands for a wealth tax with shadow chancellor Anneliese Dodds conceding that further levies, combined with public service cuts, would “damage demand and inhibit our recovery”. On Monday, Sir Keir Starmer told LBC Radio the party supported a wealth tax in principle.

FRC fines Grant Thornton
Grant Thornton has been fined £3m by the Financial Reporting Council (FRC) for “firm-wide failures” to comply with ethical standards. The auditor will pay £1.95m however, after admitting that it failed to meet standards between 2014 and 2017, and that it also failed to ensure that its audit of alcohol retailer Conviviality Retail was independently undertaken for the year ending April 2014. Audit engagement partner Kevin Engel also received a severe reprimand and a ban from signing audit opinions after he arranged for a senior manager, Natasha Toy, who was initially assigned to Conviviality Retail’s audit, to help prepare the firm’s financial statements. She too received a severe reprimand. Grant Thornton said such a situation should not arise again owing to “significant improvements and investments” made in the years since the period to which the findings relate: “These include investing in our people and resources to better ensure co nsistent quality, revising the structure of our ethics function to enable it to better support the firm, and increased levels of training throughout the firm on compliance with the ethical standard,” a spokesperson asserted.

Funding Circle boosted by business interruption loans

Shares in Funding Circle rose 5% yesterday after the online lender announced that it had approved £460m of emergency loans to small companies. The platform was cleared to offer the Government’s coronavirus business interruption loans in April. It has arranged £8.5bn of loans to 80,000 businesses since it was founded in 2010. CEO and co-founder Samir Desai said that demand for the scheme showed how many companies had struggled to secure the credit from a traditional bank.

Bell Pottinger bosses face bans

Former bosses at the failed PR firm Bell Pottinger face potential director bans under action by the Insolvency Service, the Times reports. Under the Company Directors Disqualification Act (1986), the Insolvency Service can pursue bans of between two and fifteen years for conduct that does not meet integrity standards. The firm collapsed in 2017 after a scandal in South Africa, where it was accused of inciting racial hatred in a campaign for the Gupta family. BDO has been liquidating the company and has been considering lawsuits against partners for their role in the failure.
The Times, Page: 45

Watchdog fears UK employers will seek to cut pensions bill

The UK’s pensions ombudsman, Antony Arter, told MPs yesterday that he expected the COVID-19 crisis will lead to more employers trying to persuade staff to quit their pensions.

Don’t let Covid-19 bust your business!

 It will if your cash flow dries up, either sooner or later.

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 sometime to come.

CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.

To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.

  • The annual package costs start at very low rates
  • A minimum performance warranty is provided
  • Several complimentary services included

Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).

A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?

 Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.

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.

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and  has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has  helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections


Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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Read our Cash Flow Advice

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Read our blog – What is credit management?

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see our blog – 15 steps to avoid invoice fraud

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections