Collapse of Debenhams and Arcadia will cause further insolvencies – business news 3 December 2020.

James Salmon, Operations Director.

The collapse of Debenhams and Arcadia will cause further insolvencies, Bonmarche in administration, wages in UK kept down by pandemic, vaccine will inject optimism but economic benefits may take months, may prevent house price slump,  covid-19, market and other business news.

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.

Collapse of Debenhams and Arcadia will cause further insolvencies

The collapse of the retail giants will have a ripple effect on suppliers and businesses that could lead to their trading partners also collapsing. Many of the companies will already have been in difficulties because of the pandemic. While many of the emergency liquidity measures in place for the pandemic may be keeping those companies on artificial life support, the collapse of a major customer could push them over the edge.

As soon as VAT deferrals, furlough, grants and other measures end, those businesses will fail. Emergency measures are allowing insolvent companies to continue and preventing liquidations being forced, but eventually those measures will have to be removed.

Those suppliers are going to be short of very major customers in the form of the Arcadia Group and Debenhams. HMRC will also have the status of the group’s preferential creditor, in which it will have a special claim on the assets ahead of banks and ordinary creditors such as suppliers for any unpaid tax related to VAT, NI, and PAYE.

Debenhams claimed £40m under furlough scheme

HMRC records show that Debenhams, which is being liquidated after FRP Advisory was unable to find a buyer, claimed £40.5m through the furlough scheme after it fell into administration. A spokesman for Debenhams said the money was used “in exactly the way the scheme was intended”, to preserve jobs while stores were closed during the coronavirus lockdown. The Telegraph notes that administrators are allowed to furlough staff and make claims under the job retention scheme, with HMRC saying this should only be used if there is a reasonable likelihood of retaining the employees.

IS urged to ‘rigorously’ examine Arcadia report

Business Secretary Alok Sharma has asked the Insolvency Service (IS) to take a “rigorous” look at the actions of directors at Arcadia and their conduct in regard to the collapsed retail empire’s pension scheme, which has a £350m deficit. As is normal practice in such circumstances, administrators Deloitte are required to provide the IS a report into the conduct of directors within three months. Meanwhile, Lady Tina Green, the retailer’s ultimate owner, is to add the second half of a promised £100m injection into the fund within the next 10 days. The payout had been due in September 2021 as part of a previously struck agreement with The Pensions Regulator and trustees.

Bonmarché back in administration

Retailer Bonmarché has fallen into administration for the second time in little more than a year, putting almost 1,600 jobs at risk. Administrators at RSM have been appointed to find a buyer for the chain, with the retailer expected to continue trading while RSM assesses its options. Bonmarché was snapped up by retail entrepreneur Philip Day in February. His other brands – including Peacocks, Jaeger and Edinburgh Woollen Mill – went into administration last month. Damian Webb of RSM says interest to date suggests that there will be a number of potential buyers.

Wages in UK kept down by pandemic

A report from the International Labour Organisation (ILO) shows that the UK has seen the clearest drop in wages during the coronavirus pandemic, with average real wages down by around 2% in the first half of this year compared to 2019. The analysis highlights that countries including Canada, France, Italy and the US have seen average pay levels rise during the crisis, with this attributed to the fact that most of those losing jobs were low earners. The report also shows that among G20 countries, the UK saw the joint-biggest fall in average real wages between 2008 and 2019, with Japan and Italy the only other countries to record a decline. The period saw real wages in the UK slip by 4%.

Analysts: Vaccine will inject optimism but economic benefits may take months

Analysts have predicted that the approval – and impending rollout – of the Pfizer/BioNTech coronavirus vaccine is unlikely to deliver an immediate boost to the economy. Michael Hewson, chief market analyst at CMC Markets, said that even if the first round of jabs are given out this month “it’s likely to be several months before we start to see a possible economic benefit in terms of an easing of restrictions”. Caroline Simmons, CIO at UBS Global Wealth Management, said the vaccine will inject a “dose of optimism” into domestic and global markets, saying global output and corporate earnings “are on course to return to pre-pandemic highs by the end of 2021”. PwC chairman Kevin Ellis said the start of the immunisation programme may support consumer spending in the short term and enable employers to plan for a post-coronavirus world. “The economy will recover , but won’t look exactly the same and people will need help with the transition,” he added.

Vaccine may protect against house price slump

Analysts believe the approval of a coronavirus vaccine could help prevent a downturn in the housing market. Although the market has been strong since the end of the UK’s initial lockdown – with Office for National Statistics data showing a 4.7% year-on-year price increase in September and Nationwide reporting a 6.5% annual climb in November – there has been concern that the end of the stamp duty holiday in March 2021 might see prices and activity slide. PwC economist Jamie Durham says a vaccine and the potential for a return to something nearing normality by Easter “may help to mitigate the risk of a more severe downturn in house prices in 2021 than would otherwise have been the case.”

Chancellor hints at tax rise

With the UK deficit on course to hit £394bn this year due to the increasing cost of the coronavirus crisis, Rishi Sunak has suggested tax rises could be needed sooner rather than later as he looks to balance the books. The Chancellor told Times Radio that with interest rates low, “servicing that debt, the interest we pay on that debt is exceptionally low, which means it is affordable.” Noting that the country is “much more sensitive” to changes in interest rates and inflation, he added: “And if they moved against us, that’s problematic.” The Telegraph’s Harry Yorke cites Government sources who last night insisted it is too early to discuss potential tax rises, adding that any decisions were unlikely to come until the economic outlook was more certain.

EU trade deal

France has warned it will veto a trade deal between the U.K. and the European Union if it doesn’t like the terms. The French don’t want the EU to make any last minute concessions.

Covid-19 general news

The UK added 16,170 new cases yesterday. Globally 632,548 new cases brought the total to 64.2 million. Deaths reached 1,494,986 globally with the UK adding 648 . to reach a total o 59,699.

The NHS will start vaccinating the most vulnerable next week, after 800,000 doses of the Pfizer vaccine passed batch testing this morning, the health secretary has said. Announcing the UK’s approval of the Pfizer/Biontech vaccine this morning, Matt Hancock said: “I can confirm that batch testing has been completed this morning for the first deployment of 800,000 doses of the vaccine. These doses cover the whole United Kingdom.” The UK Government has granted Covid-19 manufacturer Pfizer a legal indemnity protecting it from being sued, enabling its coronavirus vaccine to be rolled out across the country as early as next week.

Tesco will pay £585 million back to the UK government that had been offered in the form of tax relief due to the Covid-19 pandemic.Tesco said it had decided to pay back the business rates relief because its business had proven resilient and some potential risks had passed. Morrisons has also vowed to return the Government support, saying it will hand back its £274m of rates relief. Sainsbury’s & Morrisons have announced that they will pay business rates in full, waiving their right to relief. The government had decided not to collect rates this year, to provide businesses with more cash to aid them through lockdown. However, both Sainsbury’s and Morrisons announced this morning that they would pay the rates in full, totalling £684 million. Experts from real estate advisers Altus Group estimate that between them, Britain’s four largest grocers – Tesco, Sainsbury’s, Asda and Morrisons – and German discounters Aldi and Lidl would save around £1.87bn via the rates holiday.

The UN General Assembly starts a two-day special meeting on covid-19 today The meeting will be looking at encouraging international collaboration in tackling the virus which will be aided by a Biden presidency. it will also look at how to manage the humanitarian crisis caused by covid-19. It will also address the fair rollout of vaccines.


UK shares rose on Wednesday with the FTSE 100 rising 1.23% to 6463.39 following news that UK has become the first country in the world to approve the Pfizer/BioNTech covid-19 vaccine ahead of mass vaccination. Pfizer said that the first doses are already on their way to the UK, with 800,000 due in the coming days (enough for 400,000 individuals) and 40 million in total on order. US markets didnt make any major moves overnight but eked out further highs, the DOW rose 0.20% the S&P 500 rose 0.18% and the NASDAQ dropped -0.05%.

Mining shares were up on the strong Chinese manufacturing data and the LSE itself was up on news that the EU was going to approve its purchase of data analytics firm Refinitiv.

Oil rose with Brent up 2.7% to $48.7 on rising demand expectations because of the vaccine news. Gold also rose to $1826.5 as a hedge as markets awaited the news on the US stimulus deal.

The pound is at 1.106 Euros and 1.339 US Dollars.

HMRC clarifies stamp duty rules on mixed use buildings

HMRC has clarified rules regarding stamp duty payments, stating that investors buying buildings which consist of residential and commercial premises should not be forced to pay a 3% surcharge usually applied to buy-to-let properties and second home purchases. Blick Rothenberg says that many landlords who own mixed use buildings will have paid over the odds and could now be entitled to claim the tax back. The firm’s Sean Randall said a “significant tax saving may be due” for some owners.

Sunak warned over tax hikes and austerity

Experts warn that inheritance tax bills could increase as the Treasury moves to stabilise the economy in the wake of the coronavirus pandemic, with a review carried out by the Office of Tax Simplification laying out potential changes to capital gains tax that could also have consequences for IHT bills. Graham Boar of UHY Hacker Young says recent proposals are “designed to increase tax revenue and add complexity rather than simplify CGT.” Meanwhile, Richard Murphy of Tax Research UK reflects on options open to Chancellor Rishi Sunak, saying: “If he opts for austerity and tax hikes, then frankly we are heading for depression rather than a recession.”

Taxman criticised over scam stance

A Work and Pensions Committee inquiry has been told that HMRC has benefited from criminal activity by pursuing victims of pension scams. Victims have told MPs money had vanished despite being in funds registered with HMRC, with some then facing fines because the schemes broke tax laws. Labour MP Debbie Abrahams said the registration of pension schemes by HMRC and the Pensions Regulator appeared “absolutely worthless”, while Rick Muir of the Police Foundation told the hearing that the Revenue’s approach to victims was “unrelenting and uncompromising”.

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.

You put up with the PAIN – now claim the GAIN!

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.

Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?

How many of your invoices are paid late each month – 20, 50, 100 or more?

At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim! 

At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!  

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

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

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.

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