Unemployment rises – business news 26 January 2021.
James Salmon, Operations Director.
Unemployment rises, UK worst hit in G7 by pandemic, crunch time for small firms, 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.
Unemployment rises
The number of people out of work in the UK has continued it’s rise, with those aged 25 to 34 taking the biggest hit.
In the three months to November, those young people had a redundancy rate of 1.62%, a five-fold increase on the same period a year earlier.
Unemployment rose to 5% from 4.9% as Covid continued to hit the jobs market.
1.72 million were unemployed, the Office for National Statistics said.
That was 418,000 more than in the same period the previous year, the biggest increase since late 2009.
The UK’s unemployment rate rising to 5% in the three months to November is the first time this has happened in five years.
The announcement is reflective of regular negative milestones and a trend we are seeing as the latest lock-down provided yet another setback for business sectors and their workers. The Government has worked hard in an incredibly difficult environment to provide employers with much needed financial support via the furlough system, BBLS and CBILS, as well as long-term support for growth-focused companies via the likes of the Enterprise Investment Scheme, but now we would urge that there needs to be even greater support, both via financial and via sustainable growth initiatives. Employers at agile companies, which have survived 2020 and provide products or services which have a genuine medium to long term solution to a recognised problem or market need, need support through this time but will continue to develop and grow their businesses.
Both the economic contraction and subsequent job losses were to be expected as most of the UK entered a second lock-down, and while the numbers aren’t as severe due to the Chancellor’s interventions they do highlight the dire situation that many businesses are facing. We must now ensure that the financial security of those businesses that are sustainable can flourish in the future.
However, we believe that we have now passed this phase and we must recognise that many businesses will not survive this pandemic, particularly those with an unsustainable debt burden. It is imperative for the future that we now focus on identifying and protecting our most resilient business sectors.
UK worst hit in G7 by pandemic
The UK economy shrank more than that of any other G7 country last year in what the Bank of England says will be Britain’s biggest slump in more than 300 years. The UK’s dependence on consumer spending, which was so hard hit by the pandemic, is one of the main reasons. Leading into the pandemic, the UK was suffering from weak business investment, poor productivity and low wage growth going due to years of uncertainty over Brexit.
MPs demand UK Covid support for 3m excluded self-employed
A cross-party group of over 260 MPs is urging the Treasury to implement a plan to help those ineligible for pandemic-related support, many of whom are suffering extreme hardship.
Crunch time for small firms
Research by Santander reveals that small businesses do not expect business to recover to pre-pandemic levels until next summer. The bank also found that one in twelve firms do not expect to survive the pandemic at all. Susan Davies, head of business banking at Santander, said that 2021 would be a “crunch year for many”.
Call for ‘living pension’ to boost contribution levels
A report from the Resolution Foundation has called for a living pension standard to encourage employers to raise contribution rates and help workers enjoy a decent standard of living in retirement. Calculations from the think tank showed that on average savers would need to save £3,000 a year to meet the living pension target. For a full-time living wage earner, that is £1,500 a year more than current minimum auto-enrollment requirements and equivalent to an additional 8% contribution rate.
Senior figures call for crackdown on scams
MPs and adviser bosses have claimed that fraudsters who trick people out of their hand-earned savings should be met with a tough enforcement regime. Calling for a more robust approach to tackling pensions fraud, Stephen Timms, chairman of the work and pensions select committee, said: “It is becoming clear that the enforcement response, if you do report a scam, is not very convincing. We really have to gear up effectively to deal with [investment scams]. We are no way ready for it and there is a lot the Government needs to do.” His comments were echoed by those of Paul Feeney, chief executive of Quilter and chairman of the Financial Conduct Authority’s practitioner panel, who said: “If the industry and the regulators see websites, for example, where the company is clearly operating outside of its authorisation, and there is potential harm – [the regulators] should bring the darn things down. Shoot first and ask questions later.”
IFS calls for tax hikes on self-employed
The Institute for Fiscal Studies has called for higher taxes on self-employed workers and business owners. A report from the think tank points out that an employee in a £40,000 job generates £3,300 more than a self-employed worker doing the same role – and £4,300 more than someone working through their own company. IFS researchers said a “particularly attractive” option for reform was combining higher rates of self-employed national insurance contributions and capital gains with more generous allowances to encourage investment. Helen Miller, the IFS’s deputy director, said: “The Government has struggled to get support to some of the self-employed during this crisis. But that doesn’t mean we should permanently keep across-the-board preferential tax rates for business owner-managers.”
Accountants see IT investment pay off in pandemic
The FT concludes its three-part series which looks at digital transformation in various sectors, noting that the crisis has vindicated heavy spending on digital products at UK professional service firms.
Covid-19 general news
There were 22,195 new cases in the UK yesterday with 1348 more deaths.
Globally 505,144 new cases brought the total to 99.7 million with 2,141,229 deaths.
68,153,158 vaccines doses have been given worldwide.
Dr Fauci the US chief medical officer said it made good common sense to “double mask” against Covid-19 variants.
The UK death toll from Covid has topped 100,000. The data from the UK’s national statisticians show there have been nearly 104,000 deaths since the pandemic began. The figures, which go up to 15 January, are based on death certificates. The government’s daily figures rely on positive tests and are slightly lower. It comes after a surge of cases in December, leaving the UK with one of the highest Covid death rates globally.
Vaccine coverage won’t reach a point that would stop transmission of the virus in the foreseeable future, the World Health Organization said. United Nations Secretary-General Antonio Guterres said the world is risking more virus variations by not pushing for vaccines in developing nations.
If the rich world doesn’t act urgently to help developing countries get their populations vaccinated, more virus mutations could render the current shots ineffective, United Nations Secretary-General Antonio Guterres said.
Vaccine coverage won’t reach a point that would stop transmission in the foreseeable future, according to Mike Ryan, head of the World Health Organization’s emergencies program. Looking at eradication of the virus as the measure of success will mean the world is going to struggle, he added.
“The bar for success is reducing the capacity of this virus to kill, to put people in hospital, to destroy our economic and social lives,” he said. He said there’s not enough vaccines right now to even serve those who are most at risk.
Moderna has claimed that its vaccine is effective against UK and South African variants, it did not mention the Brazilian variant. They said it had begun testing a second booster of its vaccine, making three shots in total.
France’s top medical adviser Professor Delfrissy described new variants “as the equivalent of a second pandemic” and “if France did not tighten regulations, we will find ourselves in an extremely difficult situation from mid March”.
The European Union threatened to block exports of AstraZeneca’s covid-19 vaccine manufactured within its borders. The British drug firm has told the EU it will not be able to supply all of the doses it originally promised because of production problems. The bloc’s health commissioner called that “unacceptable”. Despite the fact that the EU’s vaccination programme has yet to approve the AstraZeneca vaccine.
Markets.
Yesterday the FTSE 100 closed at 6638.85 and the 250 Closed at 20,350.41. Sterling is at 1.126 Euros and 1.367 US Dollars. Brent Crude is at $56.3 and Gold is at $1854. Overnight, the S&P 500 rose 0.36% and the NASDAQ rose 0.69%.
UK stocks fell on concerns over the lack of clarity on whether the government would impose quarantine requirements on new UK arrivals and the lack of information on the re-opening of schools.
Microsoft, Verizon, and Johnson & Johnson are reporting today and Apple, Facebook and Tesla are due tomorrow/ It’s peak earnings season in the U.S. as companies representing 35.8% of the S&P 500’s market capitalization report this week. So far, most U.S. companies who posted profit that beat analyst expectations for the fourth-quarter ended up under-performing the benchmark, as investors focus on outlook instead.
Asian Markets retreated from record highs as lingering concerns about potential roadblocks Biden’s $1.9 trillion stimulus deal weighed on sentiment, dragging US Treasury yields to three-weeks lows.
Oil Prices fell as fading hopes for a rapid approval of new US stimulus and mounting new coronavirus cases raised questions over the pace of any recovery in demand.
Gold Prices inched higher in overnight trade as expectations that a large US stimulus package would be passed eventually boosted the metal’s appeal as a hedge against inflation, although a stronger dollar capped gains.
The Davos Forum started today with some 2,000 political leaders and CEO’s exchanging their views via a new online format. President Xi claimed that countries should not meddle in each other’s affairs. President Biden is not attending the Davos Forum.
Rolls-Royce
Rolls-Royce said new coronavirus strains and the tighter travel restrictions introduced in their wake is creating short-term uncertainty. Trading in December was broadly in line with expectations across all business units, the jet engine maker said, and there was “good progress” on its restructuring programme
HMRC scraps late filing penalty for those who file online by 28 February
Taxpayers will not receive a penalty for their late online tax return if they file by 28 February, HMRC’s Chief Executive Jim Harra has announced. More than 8.9m customers have already filed their tax return. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible. Anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February. The move comes after accountancy and tax professional bodies argued that advisers and taxpayers would struggle to meet the deadline this year because of the impact of COVID-19. Dawn Register of BDO comments: “This additional time will provide taxpayers and advisers with crucial latitude, which is needed in these unprecedented times. Previously, taxpayers would have needed to rely on adhering to HMRC’s definition of a ‘reasonable excuse’, which is open to interpretation.” George Bull of RSM welcomed the extension but warned that “people may be lulled into a false sense of security, thinking no penalty means no tax demand”. Nimesh Shah of Blick Rothenberg added: “The sting in the tail is that the 31 January deadline is important for all other purposes, including making your tax payment. Taxpayers will be left with a surprise in relation to interest and surcharges for late payment of tax if they wrongly believe the extension also applies to paying their tax.”
MEPs want EU to tighten tax haven rules
MEPs have voted in favour of a resolution calling on Brussels to change its tax haven blacklist system, arguing that the list, which was set up in 2017, failed to “live up to its full potential, [with] jurisdictions currently on the list covering less than 2% of worldwide tax revenue losses”. The EU Parliament said that the criterion for judging if a country’s tax system as fair or not needs to be widened to include more practices and not only preferential tax rates, citing as an example the fact that the Cayman Islands has just been removed from the blacklist, while running a 0% tax rate policy. Following the vote, the Chair of the Subcommittee on Tax Matters, Paul Tang said: “In refusing to properly address tax avoidance, national governments are failing their citizens to the tune of over €140bn. Especially in the current context, this is unacceptable.” However, he added that the bloc needed to practice some self-reflection, pointing out that EU countries are responsible for 36% of tax havens.
Boohoo agrees Debenhams deal
Boohoo has confirmed that it will acquire the online operations of Debenhams, in a deal worth £55m. However it will not take on any of the firm’s remaining 118 High Street stores or its workforce, meaning 12,000 jobs at the department store chain are now at risk. John Lyttle, the Boohoo chief executive, said the company was still “working through the numbers” on how many jobs might be saved but that there were “no definitive numbers at this point”. The administrators of Debenhams UK, FRP Advisory, said they had undertaken a “thorough and robust process” to achieve “the best outcome for Debenhams’ stakeholders”.
Asos in talks to acquire Arcadia brands
Asos has confirmed it is in exclusive talks to buy the Topshop, Topman, Miss Selfridge and HIIT brands from Sir Philip Green’s Arcadia empire. Asos is discussing a deal with administrators Deloitte but stressed there can be no certainty of a transaction and shareholders will be updated as appropriate.
Barcelona remain world’s richest football club
Deloitte ‘s latest Football Money League once again lists Barcelona as the world’s richest football club despite their revenue falling by €125m to €715.1m in 2019-20. Real Madrid were just behind while Bayern Munich climbed to third ahead of Manchester United, the highest placed English team in the annual rich list. Liverpool, Manchester City, Chelsea and Tottenham Hotspur are also in the top 10. Arsenal remain 11th and Everton are 17th. The collective revenue of the world’s richest football clubs dropped by €1.1bn year on year to €8.2bn and Deloitte beliefs they are on course to miss out on €2bn in revenue by the end of this season. Tim Bridge of Deloitte’s Sports Business Group told the PA news agency: “We usually release our money league and talk about the growth in revenue but of course football is not immune to the COVID-19 pandemic. The revenue that’s been missed out on is driven by the lack of fans in th e stadium, the lack of interaction on a matchday – fans spending in the club shop and buying food and drink – and there is an element that relates to revenue that broadcasters have either clawed back (or deferred) to next year.”
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 nsm@cpa.co.uk 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.
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 extra 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:-
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.