The Bank of England acts, what will the Chancellor do?.

11th March 2020.

James Salmon, Operations Director.

The Bank of England Governor Mark Carney announced this morning a  50-basis-point emergency rate cut  from 0.75% to 0.25% taking borrowing costs back down to the lowest level in history.

The Bank said it would also free up billions of pounds of extra lending power to help banks support firms.

He said the central bank is ready to take more action if necessary to defend the economy against the coronavirus outbreak after the central bank cut interest rates.

Carney said quantative easing remains part of the BOE toolkit. He was speaking at a press conference following the central bank’s on Wednesday.

He added that policymakers had seen a “sharp fall in trading conditions”, including spending on non-essential goods.

Commenting “The Bank of England’s role is to help UK businesses and households manage through an economic shock that could prove large and sharp, but should be temporary,”

He said the Bank’s co-ordinated action on Budget day was designed to have “maximum impact”.

Mr Carney stressed that the economic damage caused by the coronavirus remained unclear. However, he suggested that the UK economy could shrink in the coming months.

He said early evidence from China suggested that the world’s second largest economy was on course to contract in the first quarter.

Other nations were experiencing a “similar shift”, he said. “I would emphasise the direction is clear, though the orders of magnitude are still to be determined.”

Treasury and BoE plan coordinated response

The move is likely to coincide with the Chancellor’s Budget announcement later today.

As the Government seeks to give the economy a shove as the coronavirus situation worsens.

The FT notes that Begbies Traynor recorded nearly half a million companies in significant financial distress in December – the highest it had ever seen – illustrating the need to protect businesses.

Meanwhile, experts also expect the ECB to cut rates and announce measures to bolster bank lending across the eurozone on Thursday.

Small businesses need help to weather virus storm

The Chancellor is being urged to introduce measures to help small businesses in his Budget.

The Federation of Small Businesses said Rishi Sunak needed to introduce a temporary rebate for those companies paying sick pay to staff forced to self-isolate and that it should ensure leniency from HMRC over debts, offer emergency funding and create a hardship fund for the self-employed.

A temporary VAT cut may also be required should consumer demand decline significantly.

Elsewhere, Christina Fitzgerald at insolvency trade group R3 says cuts or delays to the payment of taxes such as employers’ national insurance would help relief stress on businesses as would a business rates holiday.

The Telegraph cites Chris Sanger at EY who says, in contrast to the measures needed after the 2008 financial crisis, the shock from the coronavirus needs to be countered by a “short-term boost” to the economy.


Chancellor to pledge billions in infrastructure spending

In his first budget this afternoon, Chancellor Rishi Sunak is set to deliver  a pledge to spend billions improving Britain’s infrastructure.

The Treasury said it could amount to more than £600bn over the five-year Parliament.

However, the coronavirus is likely to overshadow any policy moves with a possible cut in interest rates mooted and extra cash for the NHS to cope with the spread of Covid-19 also expected.

The FT reports that Mr Sunak will unleash the largest rise in public borrowing in 30 years to pay for increases in day-to-day public spending and long-term infrastructure projects.

An editorial in the Telegraph says that considering the Covid-19 backdrop a “package of targeted tax breaks, VAT holidays and direct support payments to struggling companies to help with cash-flow problems will be needed.”

The Sun’s Tom Newton-Dunn says the paper’s campaign to maintain the freeze on fuel duty has succeeded with Mr Sunak set to cancel a scheduled 2p-a-litre tax rise in his first Budget today.

Chancellor urged to rethink insolvency rules update

A consortium of 11 groups including insolvency trade body R3, banking organisation UK Finance and the Institute of Chartered Accountants in England and Wales are urging Chancellor Rishi Sunak to abandon plans to give the taxman priority over other creditors when companies become insolvent, with new rules due to come into force next month seeing HMRC take priority when assets are shared out in the event of a business collapsing.

The organisations stated: “The Government’s plans to grant some tax debts ‘preferential status’ in insolvencies remain a serious concern and the upcoming Budget is the Chancellor’s last opportunity to avert an avoidable error.” They went on: “Ultimately, the policy could lead to a small, short-term gain for HMRC at the expense of long-term damage to the economy

Plea for EIS commitment to continue

Lord Flight, the chairman of the EIS Association, writes to the Telegraph voicing his hopes that the Chancellor has not decided to reduce the Enterprise Investment Scheme (EIS) or to scrap entrepreneurs’ relief.

He says: “In different ways, both are responsible for the success of SMEs, which now account for more than 90% of UK employment.”

Separately, Alex Daniel examines the pros and cons of entrepreneurs’ relief in City AM, citing the FSB’s Mike Cherry who suggests perhaps the lifetime allowance should be lowered from £10m to £1m so the “benefits are felt most strongly by small business owners.”

Banks provide emergency measures for coronavirus victims

Royal Bank of Scotland, Lloyds Banking Group, Barclays, Santander UK, Virgin Money and TSB are all offering help to customers affected by the coronavirus as the disease is expected to peak in the UK in the next fortnight.

Customers could be granted payment holidays on mortgages or loans while fees for missed payments on credit cards and other charges are also being dropped.

Credit card limits are being increased and charges for withdrawing savings early are being scrapped.

Those eligible could include small business owners who have suffered a slump in income, and self-employed workers who are forced to self-isolate at home, suggests the Mail.

Stephen Jones, the chief executive of lobby group UK Finance, said: “All providers are ready and able to offer support to their customers who are impacted directly or indirectly: asking for help early is key.”

Gareth Shaw at Which? points out that credit scores could be harmed by these offers and banks must ensure credit reference agencies are informed of the changes

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

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