Stagnation, Tax and Business ahead of the election.

11th December 2019.

James Salmon, Operations Director.

We look at the latest news on the UK economy, the latest polls and the effects for tax and business ahead of tomorrow’s election.

The latest polls

A closely-watched final YouGov poll ahead of Thursday’s general election showed the race has tightened considerably in recent weeks, with Prime Minister Boris Johnson’s Conservative Party now less certain to win an outright majority of seats in Parliament.

The multi-level regression and post-stratification polling model (MRP) has seen YouGov interview 100,000 voters based on factors such as previous votes, gender and age, before mapping this on to the demography and characteristics of individual constituencies.

The MRP poll predicts the Conservatives will win 339 seats, with Labour getting 231, the Liberal Democrats  15 and 41 for the Scottish National Party. The MRP model stood out against other polls in accurately predicting the outcome of the last two elections.

However the range of possible outcomes is wide. The poll’s range of possible outcomes gives the Tories anything from 367 seats to just 311. Anthony Wells, YouGov’s Director of Political Research, said that “Based on the model we cannot rule out a hung parliament”.

What business wants

The Institute of Directors (IOD) has revealed business leaders’ priorities for government action after the General Election, with Brexit support, help with skills, and investment incentives coming out on top.

The IOD’s Policy Voice survey, which was taken by 1,008 company directors. The IOD asked them to choose which policy areas should be immediate priorities for the new Government. More than a third (37%) prioritised preparing and supporting businesses through Brexit.

Skills and training (33%), incentives for business investment (31%) and reducing the regulatory burden or delaying regulatory changes (31%) also ranked highly.

Three-in-ten directors think digital (30%) and transport infrastructure (30%) are important, respectively.

Most surveyed members agreed that nationalising utilities and industries would be negative, with three-quarters (75%) pessimistic about bringing broadband under state control. However, better broadband was still a top priority in terms of infrastructure.

The survey also asked members about the government’s approach to spending, and more than three-in-four (77%) business leaders report that spending over the next parliament should increase.

Edwin Morgan, Director of Policy at the IoD, said “By and large, directors agree that the economy needs a shot in the arm, particularly with many firms facing the prospect of Brexit upheaval”.

He added that directors on the whole think better broadband, transport networks and renewable energy generation are significant, but “taking whole sectors under state control would consume huge amounts of government time and effort while offering no guarantee of improvements”.

CEBR: Labour’s plans to seize 10% of UK firms would see GDP fall 3.1%

Analysis of Labour’s plans to seize 10% of UK firms for the Telegraph by the Centre for Economics and Business Research (CEBR) predicts overall economic output will be 3.1% lower in 20-years’ time as a result of the policy.

This would equate to £67bn a year in today’s money.

Labour’s Inclusive Ownership Fund would require the transfer of 10% of every UK company with more than 250 staff into an employee-owned fund, from which the Government would grab any dividend paid above £500 per employee.

Dan Neidle, a partner at Clifford Chance, said the seizing of dividends would be the equivalent of a corporation tax rate of 33.4%: “We would be the highest-taxed companies in the world.”

UK economy stagnates ahead of general election

The UK Economy suffered its worst three months for more than a decade after official figures revealed output failed to grow once again in October.

The economy suffered its weakest three months since early 2009 with the Office for National Statistics data showed the economy flat lined month-on-month in October, after two months of declines.

The ONS said: “Increases across the services sector [were] offset by falls in manufacturing with factories continuing the weak performance seen since April. Construction also declined across the last three months with a notable drop in house building and infrastructure in October.”

John Hawksworth, chief economist at PwC, blamed Brexit-related uncertainty for the economy’s “loss of momentum”.

He said: “Growth seems likely to remain subdued through the rest of 2019, but we would hope for a gradual revival in activity over the course of 2020 if current political and economic uncertainties ease. Our main scenario is for 1% GDP growth in 2020 assuming an orderly Brexit.”

UK trade deficit widens after no-deal stockpiling

A rush of stockpiling to hedge against a possible no-deal Brexit on October 31st led imports to rise 6.2% in the month, pushing the trade deficit to £5.2bn from £1.9bn in September, according to the Office for National Statistics (ONS).

Meanwhile, demand for British exports remains depressed as overseas firms resist adjusting their supply chains to include UK suppliers before they know what’s happening with Brexit.

UK tax burden highest for 50 years

The tax burden in the UK will be the highest since the post-war period whoever wins the general election, the Taxpayers’ Alliance has warned.

The group’s John O’Connell said: “As it stands, both potential PMs will be whacking up taxes to higher rates than any of their post-war predecessors from their respective parties.

Corbyn’s hikes would be enough even to make Wilson wince.

But while it’s true that the biggest tax rises have historically come under Labour leaders, today’s Tories are giving them a run for their money.”

House prices climb in November

House prices have however provided a silver lining.

House prices increased at the fastest rate in seven months in November, Halifax data shows.

Values were up 2.1% to an average of £234,625 in the year to November, exceeding the 0.9% year-on-year increase recorded in October.

On a monthly basis, prices were up 1%, having dipped 0.1% the previous month. Halifax’s analysis show’s stronger yearly growth than other recent surveys, with Nationwide saying prices were up 0.8% year-on-year in November and Rightmove saying values were up 0.3%.

Howard Archer, chief economic adviser to the EY Item Club, commented: “With the economy largely struggling, Brexit uncertainties extended and the UK political uncertainties currently high, it seems unlikely that the housing market will see any sustained significant pick-up in the near-term at least”

Landlords look to sell

The housing market is not all good.

Analysis shows that more than 100,000 rental homes have been sold since a tougher tax regime was introduced, with new rules including tighter limits on costs that can be offset against tax seeing some buy-to-let landlords face a marginal tax rate of more than 100%.

Data from estate agency Savills shows that 103,900 more buy-to-let homes have been sold than bought since the new tax regime, which is being phased in until 2021, was introduced.

A poll for the Telegraph suggested 26% of buy-to-let owners plan to sell at least one of their properties during 2020.

Of those looking to sell, 15% said they plan to do so because of unfavourable tax rules.

Johnson hints at scrapping licence fee

Boris Johnson has raised the prospect of scrapping the BBC licence fee, suggesting it was becoming harder to justify funding “a particular set of TV and radio channels” by “what is effectively a general tax”.

The PM also hinted at ending the corporation’s power to prosecute non-payers describing the enforcement regime as “heavy handed”.

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 our blog – 15 steps to avoid invoice fraud

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