Banking & Finance

Small firms owed £5bn

admin — Wed, 10 Mar 2010 15:28:02 +0000

Small and medium-sized businesses have been left £5bn out of pocket due to trading partners or customers going bust, according to data released by CreditPal. Over the last two years 43% of small firms in the UK have been left with an average of £7,500 owed to them. "The amount left owing to SMEs as a result of company liquidations is shocking and threatens the survival of some UK businesses. It is imperative that companies take every step to mitigate their exposure to the risk of defaulted payments, especially as the economy climbs out of recession when the need for cash is even greater," said Chris Poll, CEO of CreditPal. The total amount of company insolvencies was 19,077 in 2009, up from 15,535 in 2008.

Budget to be held on March 24th

admin — Wed, 10 Mar 2010 11:13:51 +0000

The government have confirmed that this year's Budget will be held on Wednesday the 24th of March. Prime Minister Gordon Brown, speaking at Canary Wharf, said the Budget would take place in "two weeks' time". Alistair Darling has said that he is "absolutely committed" to reducing the UK's deficit and that his Budget would show he was on course to cut public borrowing from its forecast peak of £178bn this year. Revised figures published in February showed the UK emerged more strongly from recession at the end of last year - with a 0.3% growth rather than 0.1% - than had previously been thought. However, many economists have warned that growth could falter again in the coming months. It is expected that the general election will be held on the 6th of May, six weeks after the Budget.

BCC: deficit must be cut

editor — Mon, 08 Mar 2010 12:25:28 +0000

The government must come up with a credible plan for cutting the budget deficit or risk the country's credit rating being damaged, according to the British Chambers of Commerce (BCC). However, the business body have warned against cutting the deficit too early, which could damage the UK's recovery. "Cutting the deficit too early would be a major mistake that could unleash a new recession. However, a credible plan for curbing the deficit is urgently needed," said David Kern, chief economist of the BCC. "Postponing the presentation of a plan would threaten our credit rating with damaging consequences. Any serious plan must spell out detailed measures with a clear timetable, and it must avoid damaging the economy's growth potential."

270,000 civil servants begin strike

editor — Mon, 08 Mar 2010 09:54:44 +0000

Up to 270,000 civil servants have begun a 48-hour strike over redundancy pay, in the biggest unrest by the sector in more than two decades. Courts, jobcentres, driving tests, tax offices, border controls and passports are amongst some of the services that will be affected The strike, called by the Public and Commercial Services Union (PCS), will also see civilian staff working for the Met Police and security staff working in the House of Parliament taking strike action for the first time in over 25 years. PCS is taking industrial action as it claims members could lose a third of their entitlement over cuts under the civil service compensation scheme. Cabinet Office minister Tessa Jowell said the decision to strike was very disappointing, "especially given that less than one in five of their own members voted in favour of strike action, and that, overall, this figure represents only around 10% of the total civil service workforce."

Interest rates held again at 0.5%

admin — Thu, 04 Mar 2010 12:13:21 +0000

The Bank of England has kept interest rates at the historic low of 0.5% for the 12th month in succession. This decision was widely expected, as it is feared that any rise in the cost of borrowing could damage the country's economic recovery. Despite the UK officially exiting recession with a 0.3% growth in the last quarter of 2009, some economists are warning that the recovery is still fragile. It was also announced that no more money will be pumped into the economy under its quantitative easing (QE) programme for the time being. The Bank halted QE last month, having spent £200bn. "It would be wrong to contemplate raising interest rates or scaling back the QE programme at present. Despite the upward revision to GDP in the fourth quarter of last year, the economy remains weak and fragile. Businesses are still under serious pressure and there is no room for complacency," said David Kern, chief economist at the British Chambers of Commerce.

Small firms hit by government stealth tax

admin — Thu, 04 Mar 2010 09:53:07 +0000

The flat rate VAT charged by HMRC to small companies has risen in just under half of all business sectors, according to data released by the Federation of Small Businesses (FSB). Flat rate VAT is charged to the smallest businesses with a turnover of less than £150,000 and aims to minimise the red tape around administering VAT. “When VAT was lowered in December 2008 many rates stayed the same and some were reduced by up to 2.5%. What has become apparent is that after VAT was put back to 17.5% in January this year, nearly half of the flat rate schemes have seen the VAT level rise above the pre-decrease level,” said John Wright, National Chairman of FSB. “While a few sectors have seen a decrease, the majority of businesses will see their rates rise, which is unacceptable at a time when cash-flow is limited. The FSB believes that this is a stealth tax, which will affect a firm's overall profitability.”

Managing your cash flow

admin — Wed, 03 Mar 2010 10:10:07 +0000

It is vital that all small firms have tight control over their cash flow

Deadline for rates refund approaching

admin — Tue, 02 Mar 2010 16:02:58 +0000

Small and medium-sized businesses in the UK have been reminded that they only have five weeks remaining before they lose their right to claim refunds totaling a potential £134,500,000 in overpaid business rates going back to 2005. March the 31st is the final day on which the Inland Revenue's Valuation Office will accept formal appeals challenging the level of rates paid for the last five years. Research by specialist business rates surveyors' ratesrecovery.com has revealed that there could be as much as £1.5bn of refunds that will go unclaimed by businesses unless they take action before 31st March. "Many businesses have clearly been paying excessive rates for the last 5 years but after the 31st March they will not be able to reclaim the money," said Nicholas Wright of ratesrecovery.com.

Over half of workers expect no pay rise

admin — Tue, 02 Mar 2010 14:55:44 +0000

More than half of the UK's workforce - approximately 16m workers - do not expect a pay rise this year, according to a survey by YouGov. The survey also revealed that a further nine million expect to receive a pay rise below the level of inflation. The data also shows that a third of consumers in the UK think they will be worse off this year than last and more than five million consumers spend more than they earn, and of those nearly half are using overdrafts to make up the difference. "Consumers face a double threat - the government is toying with measures such as raising taxes to reduce the public deficit, which will have a direct impact on personal finances," said Ann Robinson of uSwitch, which commissioned the survey.

Banks forced to write-off record amount

admin — Mon, 01 Mar 2010 12:14:16 +0000

The amount of debts that financial institutions have had to write off because of defaulting borrowers increased significantly in 2009, according to figures released by the Bank of England. Last year financial institutions wrote off £4.12bn in credit card loans, up from the previous record amount in 2008 of £3.2bn and the value of mortgages written off more than doubled from £408m in 2008 to £984m in 2009. Other loans written off rose from £3.2bn to £4.2bn - pushing up the total amount of write-offs by UK lenders to £9.3bn. In addition to this, financial institutions wrote-off £5.9bn that was lent to non-financial businesses. These figures may mean that small firms - many of which have struggled to access bank finance since the recession began - find is even more difficult to access funds from banks.