GDP contracts & Furlough increases- business news 1 July 2020.

1 July 2020.

James Salmon, Operations Director.

We cover new warnings regarding the Covid crisis, GDP fell more than initially thought, furlough numbers rise, Boris launches his new program, potential tax rises, crisis leads to innovation a lot of insolvency news and far 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 cases approach 10.4 million with deaths over 508,000.

Weekly deaths in the UK fell to the lowest levels seen for 12 weeks.

The US infectious disease expert, Anthony Fauci appearing at a senate hearing, warned that cases could rise to 100,000 if the US doesn’t change its attitude to the virus.

Scientists have found another strain of flu spreading in chinese pigs that has the potential to infect humans and be the next potential pandemic after covid-19.

Boris Johnson presented his “new deal” worth £5 billion to support Britain’s economy through the pandemic. The money will fund house-building and infrastructure projects, but critics accused the pledge of being too modest. Mr Johnson’s announcement was marred by news that Leicesterwould reintroduce strict loc-down measures as cases of covid-19 there multiplied.


The FTSE 100 dropped 0.9% yesterday while European stocks were flat and stocks in the US climbed with the S&P500 up 1.54% and the NASDAQ up 1.87% despite the rise in cases of covid-19 as data showed an improvement in consumer confidence and rising house prices. Asian stocks were mixed as investors played improving chinese manufacturing figures off against negative virus news. The pound is at 1.103 Euros and 1.238 US dollars.

Gold’s rally continued yesterday with futures briefly rising above $1,800 an ounce for the first time in more than eight years

Economy sees worst contraction since 1979

The UK economy shrank more than first thought between January and March, contracting 2.2% where the Office for National Statistics (ONS) had estimated a 2% dip. This marks the biggest quarterly contraction since Q3 1979.

Jonathan Athow, deputy national statistician at the ONS, said that all main sectors of the economy shrank “significantly” in March due to the hit from the COVID-19 pandemic. The services sector – which accounts for about three-quarters of UK GDP – shrank by a record 2.3% in Q1, with production down 1.5% and construction slipping 1.7%.

EY Item Club’s Howard Archer believes April’s sharp contraction is likely to have been the low point, predicting that the economy will “return to clear growth in the third quarter with GDP expanding close to 10% quarter-on-quarter” as lockdown restrictions are eased further.

BoE economist predicts V-shaped recovery

Bank of England chief economist Andy Haldane, who also sits on the Bank’s interest rate-setting committee, says the economy is likely to see a V-shaped recovery.

He told a webinar: “The recovery in both the UK and global economies has come somewhat sooner, and has been materially faster, than in the MPC’s May Monetary Policy Report scenario – indeed, sooner and faster than any other mainstream macroeconomic forecaster,” and said the loss in annual GDP could be far lower than first feared, at 8% against the 17% forecast last month.

Furloughed worker total hits 9.3m

Data from HMRC reveal that the number of furloughed workers increased to 9.3m last week, with the cost of the Government’s job support measures exceeding £33bn.

Meanwhile the number of claims made for the Government’s self-employment income support programme was unchanged at 2.6m, while the value of claims was up to £7.7bn.

The figures also show that the total cost of all support schemes including business loans is nearing £80bn.

Meanwhile, the Taxpayers’ Alliance has suggested big companies should hand back taxpayer cash used to furlough their staff. With several firms pledging to do so, Taxpayers’ Alliance spokesman Jeremy Hutton said: “The spotlight may turn to those who hold public funds they did not need.” “Taxpayers are likely to remember those businesses that pulled out all the stops to help, and those that didn’t,” he adds.

PM announces post-virus recovery plan

Boris Johnson has presented his plan for infrastructure investment that is designed to drive the economy in the wake of the coronavirus crisis. The Prime Minister outlined a £5bn “new deal” that will centre on investment in schools, hospitals, and the road and rail network, with Mr Johnson saying plans set out in the election manifesto will be speeded up and “intensified”. KPMG’s head of infrastructure Jan Crosby believes the programme should be “even more ambitious”, arguing that the £5bn does not “go very far” in terms of individual projects. Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson, welcomed the PM’s pledge, saying it “is exactly what we need to keep work flowing to the sector and to shore up the future of SME construction firms.”

Crisis prompts innovation

A survey by Be The Business suggests that the coronavirus crisis and resulting lockdown have driven small businesses to innovate, with more than half a million having changed or currently altering their operating model and a fifth introducing new services. Be The Business CEO Tony Danker said the early signs of an economic recovery can be attributed in part to this push toward innovation.

PM will not rule out tax increase

Prime Minister Boris Johnson has not ruled out increasing taxes in a bid to help foot the country’s coronavirus bill.

Asked whether taxes could rise, he said: “You know where my instincts are, what I would like to do. They are, of course, to cut taxes wherever you possibly can, but the difficulty we have is that we have a generational challenge now.” The PM said: “I remain absolutely determined to ensure that the tax burden, in so far as we possibly can, is reasonable and that we continue to be a dynamic, competitive, open market economy.”

An increase would go against a Conservative manifesto pledge not to raise income tax, national insurance or VAT.

MPs to debate tax on tech giants

MPs will today debate final stages of the Finance Bill, including the first Digital Services Tax that will see a 2% levy on the revenues of search engines, social media firms and online marketplaces in a bid to curb tax avoidance.

Fair Tax Mark has branded the 2% levy as “pretty tame”, while TaxWatch commented: “Britain must continue to push for international reform to ensure the billions in profits that US multi-nationals rip off UK taxpayers is taxed properly here.”

Labour is set to table an amendment to the Bill that calls on ministers to tell MPs how much the tax is raising each year. Meanwhile, Bridget Phillipson, shadow chief secretary to the Treasury, backs the thinking behind the Digital Services Tax, saying big tech firms “make big profits but pay very little tax”.

Writing in the Mirror, she says the Government has not gone far enough, saying: “We need a global solution, so companies can’t just change HQ to escape tax.” The paper highlights a study from TaxWatch which suggests five of the biggest tech firms – Google, Apple, Facebook, Microsoft and Cisco – avoided tax totalling £1.3bn in 2018, estimating that they had UK profits of £8.1bn but paid only £237m in taxes on them, an effective 2.9% rate

Lending scams climb amid crisis

Analysis of Financial Conduct Authority (FCA) alerts by BDO show that warnings over fake lenders have almost doubled during lockdown as fraudsters target those struggling financially due to the coronavirus crisis. The number of warnings published by the FCA related to subprime lending and debt management scams has increased by 85% over the last three months. There were 24 warnings relating to unregulated firms and suspected scammers published on the watchdog’s website between March and June, up from 13 in the same period last year. Richard Barnwell of BDO said: “With the number of scams rising significantly during lockdown, it would suggest that opportunistic fraudsters are using the coronavirus crisis as a chance to target this part of the consumer finance market.”

Alteri puts Harveys into administration

Distressed retail specialist Alteri has put UK furniture groups Harveys and Bensons for Beds into administration, little more than six months after acquiring them from South African conglomerate Steinhoff. PwC is looking to find a buyer for Harveys, with at least 240 jobs to be lost and a further 1,300 positions under review. Bensons for Beds was immediately bought back by Alteri, which plans to inject £25m of equity into the company. Zelf Hussain, joint administrator at PwC, said the group has seen cashflow pressures “exacerbated by the effects of coronavirus on the supply chain and customer sales.”

TM Lewin enters administration

Shirt maker TM Lewin has fallen into administration and is to close all 66 of its physical stores, with 600 employees set to lose their jobs. The company was bought just seven weeks ago by Stonebridge Private Equity through its subsidiary Torque Brands

M&Co appoints advisers

Retail chain M&Co, which employs 2,700 people at 262 stores, has appointed advisers from Deloitte to consider options for the business, including a possible sale via a pre-pack administration.

Signature Living Hotel group collapses

Signature Living, which owns 60 hotels, has collapsed into administration owing £113m. Matthew Ingram and Michael Lennon of Duff & Phelps believe that a going concern sale of the company is now unlikely as there are “insufficient funds and assets available to enable the company to be rescued”.

Pre-pack deal best for Everest

The pre-pack sale of double-glazing company Everest was one of six offers for the firm which collapsed owing unsecured creditors almost £70m. FRP Advisory received six offers after an accelerated sale process launched in May in which 19 prospective buyers carried out due diligence. A bid from Better Capital was accepted after discussions with Duff & Phelps, which advised secured creditor Barclays.

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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See all our latest news here!

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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.

25 excuses for late payment and how to get around them.

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog – How to select a debt collection agency

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see our blog – 15 steps to avoid invoice fraud

Overcoming 5 common reasons for disputed invoices

As insolvencies rise, could you spot these warning signs in your customers?

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