Mortgage default spike predicted business news 16 October 2020.

James Salmon, Operations Director.

Mortgage default spike predicted, cash managers concerned over negative rates, Brexit,  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.

Mortgage default spike predicted

A mortgage default spike predicted for the fourth quarter is coming according to bankers.

Banks are bracing for a spike in the rate of defaults on mortgages during the final three months of this year, the Bank of England’s (BoE) latest credit conditions survey has found.

The BoE’s quarterly report also shows that lenders expect demand for mortgages to stabilise in the fourth quarter, after rising in the previous three months.

Lenders are expected to restrict loan products in Q4, though not by as much as in Q3. It was also found that banks raised the cost of loans in the third quarter and plan to continue increasing average interest rates in the fourth.

Mark Harris of mortgage broker SPF Private Clients said concerns about the impact of the coronavirus crisis on earnings “and what will happen to property prices, particularly for those borrowing at high loan-to-values” is driving increasing caution in the sector.

Cash managers concerned over negative rates

The Association of Corporate Treasurers (ACT) has warned that negative interest rates would be a “very bad idea”. Caroline Stockmann, chief executive of the ACT, said her members are “very worried” about negative interest rates. The body, which represents 90% of the FTSE 100, said businesses may refuse to pay interest fees on their deposits if the Bank of England cuts rates below zero, adding that negative rates could also cause “systems and IT issues.” Elsewhere, NatWest chairman Sir Howard Davies has warned that lenders are not ready for negative interest rates. With Sir Howard citing possible technical issues, the Telegraph notes that PwC earlier this year warned bankers that there was a “Y2K” aspect to getting ready for sub-zero rates, referring to the Millennium Bug that saw a need to update systems to cope with dates beyond 1999.

HMRC probes 24k freelancers over support grants

HMRC is contacting 24,000 freelancers who applied for state support grants amid the coronavirus crisis, checking to ensure they met the criteria for self-employed income support grants when they applied. Those that made claims after they were forced to stop trading during the pandemic will be told to hand back any funds, with the scheme designed to save freelancers intending to continue operating. Those who did stop trading before they applied must inform HMRC by November 20 and hand back any money received so as to avoid penalties. HMRC says that 100,000 freelancers that have stopped trading were sent information about the scheme. Of these, 30,000 went on to apply for support. The Revenue has determined 6,000 were trading at the time they applied and therefore qualified. As part of its post-payment compliance checks it is now looking into whether the remainder were eligible.

Chemists’ concerns

The National Pharmacy Association has warned that local chemists could be forced to cut services unless the Government pumps cash into the sector. Chairman Andrew Lane said chemists are bracing themselves for a second wave of coronavirus and the extra pressure and costs it will bring them. Analysis by EY published last month shows that 72% of independent pharmacies will be losing money within four years if things go on as they are, with community chemists underfunded by £497m a year.


Negotiations between Britain and the European Union over their relationship post year-end are approaching a crisis after EU leaders told U.K. Prime Minister Boris Johnson he must make concessions.

EU Leaders are set to call for post-Brexit trade talks to continue beyond the end of the week – the deadline suggested by Boris Johnson. They gathered yesterday  in Brussels for a two-day summit to discuss Brexit.

Prime Minister Boris Johnson said the U.K. will now get ready to leave the European Union’s single market and customs union without a new free trade deal in place, blaming the bloc for refusing to offer good enough terms.

He said he would always be willing to hear from the EU if the bloc’s leaders came back to the U.K. with “a fundamental change of approach.”

Foreign Secretary Dominic Raab said the U.K. is “disappointed and surprised” that the EU had watered down its commitment to intensifying the trade talks. A deal, he said, “depends on the other side.” “We have been told that it must be the U.K. that makes all of the compromises in the days ahead,”  “That can’t be right in a negotiation so we are surprised by that”

Covid-19 general news

Global cases pass 38.7 million and deaths top 1.09 million with 406,660 new cases globally yesterday.

The U.K. reported a further 18,980 new cases and 138 new deaths on Thursday, as it wrestled with how to control the virus in its hot spots.

London and Essex will face Tier 2 coronavirus restrictions from Saturday with households banned from mixing indoors, barring millions of the capital’s residents from meeting other households in their homes or other indoor spaces. It means the capital will be shift from “medium” to “high” alert. Care minister Helen Whately told London MPs this morning that London will move from Tier 1 to Tier 2 on Friday night into Saturday. The new restrictions mean a ban on household mixing indoors with anyone outside your household or support bubble. The rule of 6 will still apply to outdoor meetings. The move was welcomed by Mayor Sadiq Khan, who asked for more financial support and repeated calls for a “circuit breaker” or lockdown.

Labour leaders in the north of England however are rallying against the restrictions being imposed by the Conservative Government in London. Talks over whether Manchester will go into the highest level of restrictions ended without a conclusion on Thursday, as local leaders resisted tougher measures. Greater Manchester Mayor Andy Burnham asked for more government support for businesses if they are forced to close. Meanwhile the argument is growing for a national circuit breaker lock-down to stem the rising tide in cases.

The U.K. also imposed quarantines on those arriving from Italy, while removing the restriction on people traveling from Crete.

A large study involving 11,000 people in 30 countries found remdesivir to be ineffective at fighting covid-19. America had authorised the antiviral on an emergency basis to treat its active infections. The study sponsored by the World Health Organisation, discovered that it failed to prevent deaths.

The antibody cocktail U.S. President Donald Trump credited for his swift coronavirus recovery won’t become widely available because it’s impossible to make enough for everyone who might need it, according to the Swiss pharmaceutical giant working on scaling up production.

“We’ll never be able to produce enough,” said Bill Anderson, drugs chief at Roche Holding AG, which is working together with U.S. biotech Regeneron Pharmaceuticals Inc. on the project. “This is clearly part of the answer for the world, not the answer. Hopefully we’ll have vaccines and other therapeutics.”

Things took a twist as European Commission President Ursula von der Leyen left a summit in Brussels after a member of her staff tested positive for Covid-19

JD Wetherspoon swung to an annual loss and warned of an even more uncertain outlook for pubs ahead amid ‘ill-thought-out’ recently imposed government restrictions to curb the Covid-19 outbreak


European equity markets swung sharply lower yesterday as a host of more stringent lock-down measures were announced, aimed at stopping the spread of Covid-19.  Having recovered some ground from the lows of the day, The FTSE 100 was down by 1.7% at the close of the day while the 250  fared somewhat better only ending 0.6% lower.

The pound meanwhile dipped as Brexit talks turned sour and Johnson continues to flirt with pursuing a no-deal Brexit.

In the US markets opened lower after comments from Treasury Secretary Steven Mnuchin dashed investors hopes of a US stimulus package agreement before the Presidential election next month. The S&P 500 dropped -0.15% and the NASDAQ dropped -0.47%.

Asian markets are mostly subdued.

Oil prices fell nearly 3% as new restrictions to stem a surge in COVID-19 infections increased uncertainty over the outlook for economic growth and a recovery in fuel demand. Gold prices fell as the dollar gained after US Treasury Secretary Steve Mnuchin dimmed hopes for a new fiscal stimulus package before the Nov. 3 presidential election.

US Unemployment

Bad news across the number of Americans making new claims for unemployment benefits rose to 898,000 for the week to October 10th, an increase of 53,000 from the previous week and the most since August. The economy has still not replaced 10.7m of the 22m jobs lost during the pandemic and Democrats and Republicans remain unable to agree on a new stimulus package ahead of the election.

Dubai offers tax-free remote-working visa

In an effort to attract overseas workers, Dubai is offering a remote-working visa that would allow them to pay no tax on their salaries. The one-year programme allows international employees to keep their job and take advantage of the United Arab Emirates’ zero income tax policy. Steve Asher of Moore Kingston Smith suggests that “split year” tax rules may cause issues for UK employers in terms of payroll administration.

Firms praised over pay gap plea

James Moore in the Independent praises business leaders who signed a letter to the Government calling for ethnicity pay gap reporting to be made mandatory, noting that “heavy hitters” from KPMG, PwC, Deloitte and EY were among signatories.

Jet could boost economy by £25bn

The Tempest project, the UK’s proposed new fighter jet programme, could support thousands of jobs and boost the economy, according to initial estimates by PwC. The report says the programme could support around 20,000 jobs every year between 2026 and 2050 and add £25.3bn to the UK’s economy by the middle of the century. The analysis does not include the potential benefit of export sales.

Contract costs in COVID fight

The Guardian reports that the bill for private consultants hired by the Government amid the coronavirus pandemic has climbed to £175m, noting that Deloitte has been awarded contracts worth £22.7m, while PwC’s contracts are worth £24.4m. The FT also looks at Government contracts linked to the crisis, noting that Deloitte was appointed to manage personal protective equipment procurement for hospitals and testing sites.

Considering the case for upping corporate tax

Oliver Kamm in the Times considers the case for increasing corporate taxes. He notes that of the £825bn in Government revenues in 2019/20, corporate tax receipts stood at £52bn. He also points to a Centre for Policy Studies report suggesting that an increase in corporation tax would see UK international tax competitiveness “plummet” – but says he is “not persuaded.” Mr Kamm argues that down the line the Government will need to raise taxes to restore public finances in the wake of the coronavirus crisis, commenting: “A rise in corporate tax rates ought to be part of that longer-term strategy.”

MPs in tax gap call

The Commons Public Accounts Committee has called on HMRC to offer greater detail on the gap between tax that should be paid on the UK’s economic activity and the tax actually collected. While HMRC said the tax gap was estimated to be £31bn in 2018/19, the committee said the figure has a wide margin of error as HMRC does not include sophisticated tax planning by the wealthy and large businesses in its estimate, with legal avoidance methods thought to cost the public purse billions of pounds each year. The committee said HMRC is not sufficiently clear about levels of uncertainty when publicising the tax gap and suggested that the Revenue does not know the relative size of tax gaps in the four nations of the UK or across different industries. Jim Harra, chief executive of HMRC, has written to committee chair Meg Hillier, saying: “HMRC is the only revenue authority in the world that compiles and publishes a compr ehensive measure of the tax gap … we believe it’s important to be transparent in our work.” Noting that HMRC’s methodology has been intensively reviewed by the International Monetary Fund, Mr Harra added: “With this in mind, I find the committee’s characterisation of our work in this area to be wholly unfair and unsubstantiated.”

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.

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.

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.

Keep up to date with the latest news by following us on social media:-

CPA on Linkedin

CPA on facebook

CPA on twitter

See all our latest news here!

Housekeeping: Opening a New Account

Late payments are never good for business. What can you do?

Get paid earlier by understanding why late payments happen.

Protecting Your Business isn’t Half As Painful As You Think

The Good, the Bad and the Ugly – recognising the types of payers you do business with!

See our blog on how to communicate with your debtor early and clearly to set the framework for prompt payments

Everything You Always Wanted To Know About Debt Recovery (But Were Afraid To Ask)

Understand the “why” behind late payments

Read our blog on what to do when not paid on time

10 Bad Habits Every Credit Controller Should Give Up

The Credit Controller’s Best Friend

Debt Recovery: It’s Easier Than You Think!

How Managing Your Cash Flow Can Make You (and Your Business) A Success

Avoid insolvency – Don’t let your money go up in smoke

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

20 ways to avoid identity theft

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.