UK Insolvencies set to rise –  business news  22 July 2020.

22 July 2020.

James Salmon, Operations Director.

UK insolvencies look set to rise sharply, a spending review to be announced, more calls to restructure SME covid debt, the need to factor Covid19 into financial reporting and a lot 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.

UK  insolvencies to rise sharply as state support measures unravel

Begbies Traynor warns of a sharp rise in company UK insolvencies as businesses face the “double whammy” of accruing liabilities and the withdrawal of state support schemes.

The UK insolvencies are good news for some. The insolvency specialists Begbies Traynor has reported a rise in revenue of 17% from £60.1m to £70.5m, with profit before tax falling from £3.3m to £2.9m for the full year.

Net debt was down from £6m to £2.8m, with executive chairman Ric Traynor commenting: “I am pleased to report a year of strong financial performance with growth in revenue and earnings delivered by our organic and acquisitive strategy. Our recovery and advisory teams start the new financial year in a strong position to deliver results ahead of last year.”

Spending review announced by Treasury

The Treasury has launched a review of government spending, set to be published in the autumn. Chancellor Rishi Sunak said, “tough choices” would have to be made as a result of the COVID-19 pandemic, with Whitehall departments urged to “identify opportunities to reprioritise and deliver savings.”

This comes as public borrowing in the first three months of the 2020-21 financial year increased to £127.9bn, according to the Office for National Statistics. Jeremy Thomson-Cook, chief economist at financial services firm Equals, commented: “The UK economy continues to burn, and the Government’s spending taps need to remain open for the foreseeable future in order to give businesses and consumers every opportunity to support each other as we gradually return to normality.”

Plan to relieve businesses of unsustainable debt

Sir Adrian Montague, chairman of TheCityUK Leadership Council, explains in the Telegraph how its proposals could help businesses convert, restructure and repay debts sustained through government-backed loans during the coronavirus pandemic.

Viable but highly indebted SMEs should be allowed to convert their debt into a more manageable form, says Sir Adrian, while the smallest businesses could see their repayments means tested via the tax system, “perhaps using taxable profits as a measure of affordability”.

Coronavirus loan schemes lend nearly £48bn in total

The Government’s coronavirus loan schemes have now lent nearly £48bn to businesses, with the bounce back loan (BBL) programme, under which the government backs 100% of loans up to £50,000 leaving the government at risk of being “saddled with the debts of insolvent small companies,” according to City AM.

This comes as coronavirus support programmes such as the job retention scheme, which pays the wages of workers who otherwise might lose their jobs, are gradually withdrawn by the government. Meanwhile finance body TheCityUK is predicting a wave of defaults on some £35bn of corporate debt taken on during the crisis.

FRC: Companies need to enhance COVID-19 reporting

The Financial Reporting Council has said that companies need to do more to explain the impact of COVID-19 on their performance.

The FRC conducted a review of a selection of interim and annual financial statements with a period end date of March 2020, all of which had a post-UK lock-down period end date.

The regulator said in reviewing interim financial statements, it considered the requirements of IAS 34 and whether the information provided in the interim accounts offered sufficient information to enable a user to understand the impact of COVID-19.

The review found that although companies provided sufficient information to enable a user to understand the impact COVID-19 had on their performance, position and future prospects, some – particularly interim reports – would have benefited from more extensive disclosure.

In summary, the FRC said companies should explain the significant judgements and estimates made in preparing their accounts and provide meaningful sensitivity analysis or details of a range of possible outcomes to support any disclosed estimation uncertainty.

UK Grocery sales

Grocery Sales rose by 17% during the 12 weeks to July 12, the fastest growth rate since 1994, data from research agency Kantar showed on Tuesday.

Kantar said total sales reached a record £31.6 billion in the period, up from £27.05 billion, reflecting three months of increased grocery purchasing during lock-down while most other retailers, bars and restaurants were either closed or experiencing significant reductions in trade.

Green Blue

The Thames Estuary growth board today launched a new development initiative that could add up to £115 billion to the UK economy. Named the “Green Blue”, the scheme comprises 30 individual projects in the south-east, with the potential to create 1.5 million jobs. These include infrastructure developments such as the Lower Thames Crossing, as well as plans for one of the UK’s 10 new freeports at Tilbury.

Home deliveries

Royal Mail said parcel deliveries jumped as households ordered online during Covid-19 lock-downs, though the rise was offset by a continuing deterioration in letter volumes.In a trading update for the second quarter of 2020, the company said parcel volumes jumped by 117m units, or 38% on-year. Letter volumes, however, dropped by 778m letters, or 33%.

UK-US trade no deal

The UK Government has reportedly abandoned hopes of reaching a trade deal with the US by the end of the year, with officials blaming the pandemic for the lack of progress. The Prime Minister and international trade secretary Liz Truss wanted to agree a deal before November’s American presidential election.

Covid-19 general news

There were 239,468 new reported cases yesterday worldwide bring the total count close to 15 million.

Donald Trump resumed his covid-19 press briefings, after a three-month break, with the admission that America’s epidemic “will get worse before it gets better”. Trump asked Americans to wear a mask when not able to distance “Whether you like the mask or not, they have an impact”

Reports are that covid antibodies don’t last long with marked fall after 90 days, raising the risk that herd immunity will be illusive. However there still appears to be low chance of reinfection and T-cells may play a role in this.


UK shares rose early on yesterday, following European markets after the announcement of a massive stimulus deal to prop up battered EU economies, while positive data from an array of COVID-19 vaccine candidates fuelled global optimism for a second session. However the market gave up the games as the day progressed. Oil prices rose as well, helped by the positive news about vaccine trials and EU stimulus. Gold prices also rose more than 1% to a nine-year high yesterday, pushed by a softer dollar and expectations of more stimulus measures to resuscitate pandemic-hit economies. US Markets also gave up earlier gains after Senate Majority Leader Mitch McConnell said he doesn’t expect another stimulus bill to pass in the next 2 weeks.

HMRC announces lowest property sales figure ever

HMRC has revealed that property sales reached the lowest level on record in the three months to June, with 63,250 residential transactions in Britain that month, up 31.7% from May. North London estate agent Jeremy Leaf noted that the stamp duty holiday has resulted in buyers bringing decisions to move forward, commenting that “there is still concern that improved conditions will be relatively short-lived as economic news deteriorates and furlough support falls away.”

Property revaluation put off to 2023

The Treasury risks condemning businesses struggling with the fallout from the coronavirus pandemic to paying business rates bills that bear “no relation to economic realities” after it delayed a reassessment of property values, experts have said. The Government said postponing valuations until 2023 would “reduce uncertainty for business” but Jerry Schurder, head of business rates at Gerald Eve, the property adviser, said: “This announcement does indeed ‘give businesses certainty’ – but only in that they now know their bills are going to remain unsustainably high.”

NAO raises concerns over HMRC cuts

HM Revenue and Customs has been praised by the National Audit Office for shrinking the tax gap but concerns were raised over cuts to the number of tax audits taking place.

While more funds have gone into early interventions to prevent non-compliance, cuts to other areas have reduced “by a third the number of traditional enquiries and audits investigating non-complying taxpayers over the past three years”, the audit office said.

The NAO highlights the risk that reducing resources for compliance activity in areas with high returns could disproportionately affect the tax gap,” it added.

Making Tax Digital programme to be extended

HMRC has announced that the Making Tax Digital programme will be extended to firms with turnover below the VAT threshold of £85,000 from April 2022. Taxpayers who file self-assessment returns for business or property income of more than £10,000 a year will be brought into the programme the following year.

The move has been criticised by Mike Cherry, chairman of the Federation of Small Businesses, who remarked: “The last thing we need is wholesale expansion of Making Tax Digital without the right support in place. Government should be backing small businesses and the self-employed to drive recovery from a severe recession,” noting that the proposed changes would “mean more costs and paperwork for small firms at a critical time.”

Jesse Norman, financial secretary to the treasury, said the reforms were designed to bring the tax system into the 21st century. “Making Tax Digital will make it easier for businesses to keep on top of their tax affairs. But it also has huge potential to improve the productivity of our economy, and its resilience in times of crisis,” he said.

UK ministers accused of turning blind eye to any Russian interference

A long-awaited parliamentary report into Russian influence in Britain has concluded that the Government has not done enough to probe possible Russian interference in UK democratic processes. The report also claimed lawyers, accountants and estate agents have acted “wittingly or unwittingly” as “enablers” for wealthy Russians who have links to the Kremlin.

Advice needs to improve to ensure pension freedom success

A survey of 115 advisers by Openwork has found 51% believe access to advice needs to improve to ensure pension reforms continue to work well. Some 56% of those polled also said they worried about low levels of consumer understanding despite the reforms being in operation for the past four years. Advisers were also concerned about the increased use of drawdown, with 68% of advisers saying non-advised drawdown was their biggest worry after four years of pension freedom.

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