Whether it’s personal invoice scamming or business invoice scamming, with the rise of online payments, cyber scamming is a very real, and very common thing these days. “Fraud: The Facts 2020” was a report released last year from UK Finance, a trade association that represents more than 250 banking and financial services firms in the UK.
The report focused on Authorised Push Payment (APP) scams, a form of fraud that most typically includes impersonation and where payments are made in real-time directly to the scammer's account.
For businesses, deception scamming is one of the most common APP scam occurrences. In this, scammers portray a supplier by sending a fake invoice. This is often done via email, with the scammer either intercepting emails or compromising an email account. In the email, they claim that their bank account details have changed and so to please send payment to this new account.
In addition, CEO fraud, where the scammer mimics the victim’s CEO or another person of authority, is also prevalent. In this method, the scammer requests an urgent payment be made to a supplier’s updated payment account. This involves the scammer making use of email spoofing software or being able to access the company’s email system so a “genuine” looking email from the CEO or the like is received by the finance department.
Some of the key findings and statistics from the report include:
Next week, we'll take a look into what you can do in your business to help avoid being a victim of invoice fraud.
To read the UK Finance report in full, visit: HERE
The UK rate of redundancies recorded since the beginning of the coronavirus (COVID-19) pandemic has surpassed the highest rate that was reached during the 2008 to 2009 financial crisis, latest figures from the Office of National Statistics (ONS) show.
Measured as the number of redundancies per thousand employees, the rate of redundancies is based on data from the Labour Force Survey (LFS) and captures the period between July and November 2020. While it is obvious that the economic fallout from COVID-19 will be a key contributor to the results, uncertainty surrounding Brexit will also have played a part in these statistics.
Specific statistics include:
While some sectors have experienced a period of wind-down, others have gaping big employment holes that are calling to be filled as quickly as possible. The adult social care sector is one of them, with both short-term and long-term opportunities available for roles such as personal care, wellbeing support, supply delivery, cooking, cleaning and more.
Employment Minister, Mims Davies comments, “we are excited about the variety and breadth of opportunities available to jobseekers. There are many entry-level roles that offer on-the-job training to help jobseekers develop their skills and confidence while they work. Care, along with construction and agriculture, is one of the sectors where there is a real need for people long-term. They are part of the 500,000 vacancies we need to fill, which is why it is important that we are matching people with the right roles.”
With the end of the Brexit transition period taking effect on December 31, 2020, changes to procedures and paperwork is really just the tip of a very big iceberg for UK businesses who trade with Europe.
So now, to assist small and medium sized businesses who are affected by all these changes to trading rules, the UK government is extending a helping hand in the form of the £20 million SME Brexit Support Fund.
Michael Gove, Chancellor of the Duchy of Lancaster, last week announced the scheme which encourages traders to apply for grants of up to £2,000. The amount is to help with importing and exporting, specifically with relation to new customs, rules of origin and VAT rules that will be imposed from April to July of this year.
Chancellor of the Duchy of Lancaster comments, “the Government has listened carefully to the issues raised by the business community through the Brexit Business Taskforce and that’s why we are bringing forward this financial support to help small businesses adapt to the changes to our trading relationship with the EU.”
“This new targeted funding will see small businesses get more of the practical support they need to adjust to the new processes and prepare for further changes as we implement our own import controls in April and July. Together we will seize new opportunities available to a fully independent global trading United Kingdom.”
Applications for the grant open in March and will be administered through the pre-existing Customs Grant Scheme.
If you're an EU trading SME in the UK, there are various other support options that are also available. These include sector-specific Brexit Business Taskforce meetings, a Brexit Checker Tool that provides businesses with individualised lists of actionable steps that they need to take, as well as helplines, webinars and more.
For more information regarding the Brexit Support Fund or the various support options which are available to UK SMEs, visit: HERE
In the previous blog, we touched on some recent studies relating to mental health statistics since the onset of COVID-19. The numbers show a significant decrease in the percentage of people who have sought help from their GP for depression, anxiety and self-harm.
And in the face of this global pandemic, the way in which many of us work and conduct business has drastically changed, playing havoc on our mental health. For now, the days of boardroom meetings, team catch-ups and water-cooler talk are no more. Connecting with each other can be a challenge, leading to people feeling out of touch, disconnected and unengaged.
As a business owner or manager, it’s imperative that the well-being of your staff during these times is always at the top of your mind. While it’s obviously not 100% your responsibility, ensuring that your business has mechanisms and practices in play that help to support your employees, will help to keep the company moving forward and coming out the other side.
Here are 4 tips for how to manage the mental health of your work-at-home employees during COVID-19:
Well, it’s official; January has been and gone. And for many, I’m sure they wish they could say the same about England’s second round of lockdown which is in full force. On Wednesday last week, it was announced by the Prime Minister that come February 22, there would be a “gradual and phased” plan released for the easing of the current lockdown restrictions. The plan relies on the slowing of illness and death rates and the reduction of transmissions rate thanks to vaccines and lockdowns.
Mr Johnson said that the government hopes it will “be safe to begin the reopening of schools from Monday the 8th of March, with other economic and social restrictions being removed thereafter, as and when the data permits, then or thereafter."
This March date for the potential ease back into normality is a little light at the end of a dark tunnel for some. The effects of the pandemic have been hard on not only businesses and our economic world, but also on communities and their headspace. Research last year from the University of Glasgow which was published in the British Journal of Psychiatry looked at the impacts that the first lockdown had on people’s mental health. Specifically, it found that “one in four respondents experienced at least moderate levels of depressive symptoms.”
And now, there has been more research conducted, this time from The University of Manchester (in conjunction with The Conversation UK and the National Institute for Health Research Greater Manchester Patient Safety Translational Research Centre). In this study, they found that fewer people sought help for mental illness during the first lockdown.
“We found significant reductions in the number of working-aged people (ages 18 to 64) and people living in the most deprived communities seeking help for anxiety and depression,” the article states.
Their research looked at the health records of over 14 million people aged 10 years and up. These were people who were registered to a UK GP and who sought help for the first time regarding their mental health. Numbers showed that there was a large decrease in these percentages. Specifically, the number of people seeking help for depression decreased by 43%, anxiety disorders by 48% and self-harm by 38%.
And while these numbers may simply be representative of all the UK government “stay at home” messaging, it does raise concern. As we go into the 5th week of our second lockdown, how are people coping? And are they able to get the help they need if they need it?
Stay tuned for part 2 on this topic, where we look at how the mental health of employees who are working from home can be supported.
For more information or to see the research article in full, visit: HERE
A good news story was announced last week by the UK government with the changes to small supplier invoice payment times under the Prompt Payment Code. The new directive now dictates that invoices must be paid within 30 days, a reduction by half. The current timeframe allowed is 95% of invoices paid within 60 days, aiming for 30 days as the "norm". This is a big step in the right direction for the SME economy and a big win for the Federation of Small Businesses, who have been pushing for this via their #FairPayFairPlay campaign for a long time.
The changes to the PPC come into effect from 1 July 2021. “Our incredible small businesses will be vital to our recovery from the coronavirus pandemic, supporting millions of livelihoods across the UK. Today, we are relieving some of the pressure on small business owners by introducing significant reforms to the UK payments regime – pushing big businesses to pay their suppliers on time. By signing up to the Prompt Payment Code and sticking to its rules, large firms can help Britain to build back better, protecting the jobs, innovation and growth which small businesses drive right across the UK,” commented Paul Scully, Small Business Minister.
Launched originally in 2008, the Prompt Payment Code, “sets the gold standard in payment terms and plays an important role in bringing about a culture change in payment practices. This, alongside a package of measures taken forward by government and industry, demonstrates our commitment to tackling late payment” (Source: https://www.smallbusinesscommissioner.gov.uk/ppc/code-criteria/.
As of March last year, there were 2,500 signatories signed into the code. The number today stands at nearly 3,000. However, late payments are still a major sore point for many SME’s across the UK, with £23.4 billion owed to businesses across Britain.
The Federation of Small Businesses has just released its Q4 2020 Small Business Index (SBI) and the figures are decidedly grim. Specifically, a major indicator in the SBI is business confidence. And so really, the numbers being so low can only be expected as the nation, and the world, battles through this Coronavirus pandemic.
This latest SBI report shows that nearly 5% of businesses surveyed say they’re forecasting closure this year. With around 5.9 million small firms in operation in the UK, this equates to potentially 250,000 businesses which may be forced to shut-up shop.
Mike Cherry, National Chairman of the FSB comments that, “The development of business support measures has not kept pace with intensifying restrictions. As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods. A record number say they plan to close over the next 12 months, and they were saying that even before news of the latest lockdown came through.”
The FSB surveyed over 1,400 small businesses at the end of December 2020. Here is a round-up of the key findings:
And while we covered the latest Covid-19 support grants which the UK government have made available for those within the hospitality, retail and leisure sectors, Cherry warns, “There are meaningful lifelines for retail, leisure and hospitality businesses, which are very welcome as far as they go. But this Government needs to realise that the small business community is much bigger than these three sectors.”
With more patients in hospitals throughout England now than when compared to the COVID-19 first wave, something drastic had to be done. And here’s hoping, that the new national lockdown measures which legally came into force on Wednesday, 6 January (26th December Scotland), puts the well-being of the UK people and the economy on a straight and narrow path to health and prosperity.
“While there is an overarching need to protect public health and bring coronavirus under control, this is disheartening news for small businesses and a blow to an economy that’s already on its knees. Restrictions have been a harsh reality for almost a year and this is anything but a fresh start to 2021,” commented Mike Cherry, The Federation of Small Businesses (FSB) National Chairman.
Cherry went on to say that “it must not be forgotten that all this comes at a time where 69% of small businesses are now in debt, with 40% saying the level of debt is “unmanageable”. Many are trying to navigate the UK’s new trading relationship with the EU, which to avoid tariffs adds further bureaucracy and cost pressures.”
As the new lockdown laws are enforced, comes a lifeline for some small businesses. Part of a lockdown fund worth £4.6bn and handed out from Chancellor Rishi Sunak, small businesses within the hospitality, retail and leisure sectors can leverage a one-off grant up to the value of £9,000 per property. Further support available includes a £594m discretionary fund available for other businesses which have impacted. Plus a £1.1 bn discretionary grant available to Local Authorities and more.
"Throughout the pandemic, we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring. This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen" commented Sunak.
New year, new start, right? That’s the outlook that many had when they very vocally said goodbye to the ghastly year that was 2020 and hello to a brighter, onwards and upwards 2021 – despite the many COVID restrictions that are still in play throughout the UK. It’s something that I found very curious, this notion that simply with the change of a calendar year that things would instantly be different; for we are all still in the same place as we were on December 31st, 2020 when compared to January 1st, 2021. We are all still on this same road with no major changes to our trajectory despite a change in the noted year.
And as much of the UK is still trying to function amid current COVID restrictions, with much-anticipated vaccines hanging in the air, the outlook for 2021 is decidedly cloudy, with a high chance of more storms before there can be a break in the rain to let some sunshine poke through.
So what exactly is forecast for the UK economy in 2021? Here are 4 predictions on the UK economic outlook for 2021:
Efforts are high and so is the price that is being paid by many business owners in the UK retail sector. In a bid to stop the spread of the new COVID-19 variant, the UK and devolved governments rolled out their tier 4 restrictions on Boxing Day across London and South East England as well as Wales, Scotland and Northern Ireland.
With almost 24 million people living in a tier four area, the highest of the tiers, the effects of this were surely going to be strongly felt this Boxing Day. The restrictions calls for all non-essential shops to close, along with hairdressers, nail bars and indoor entertainment venues. As a result, foot traffic for retail business owners on what would normally be one of the busiest times of the years will be very much missed.
Figures estimated by The Centre for Retail Research Centre are that physical stores would take £1.45bn in sales on Boxing Day, with an extra £1.79bn taken online.
“We had been expecting offline (bricks and mortar stores) to provide hard-pressed retailers with sales of £2,260m, and even this would have been 25% down on last year, but £1,450m must be lower than any year since 1999,” commented Director for The Centre for Retail Research Professor Joshua Bamfield. He further went on to say that the new tier 4 restrictions had “ripped the heart out of Boxing Day sales.”
“Online retail has risen higher to compensate for the fact that non-essential stores are all closed in tier 4 areas, but only by 5%. Christmas sales were always going to be problematic in times of Covid-19 but these figures are a disaster for the sector,” said Bamfield.
And, he was on the money with preliminary results released from retail agency Springboard showing that, up to 10am, footfall was down 57% when compared to the same time last year.
“For businesses, the government’s stop-start approach is deeply unhelpful — this decision comes only two weeks after the end of the last national lockdown and right in the middle of peak trading, which so many are depending on to power their recovery,” said Helen Dickinson, the British Retail Consortium, Chief Executive.
The UK Government’s Kickstart Scheme has well and truly been kickstarted with more than 700 small firms already signed up, and that number increasing each week. The brainchild of Adecco Working Ventures (AWV) and the Federation of Small Businesses (FSB), the scheme aims to provide work placements to unemployed people aged between 16 and 24 and has been given the go-ahead from the Department for Work and Pensions.
“We have opened an important gateway through the Federation of Small Businesses and Adecco Working Ventures to help small employers and sole traders create new life-changing opportunities for young people through our Kickstart scheme. This is a crucial part of our Plan for Jobs to create and support jobs across the UK, ensuring help reaches those who need it most and they aren’t left without hope or opportunity, “ commented The Secretary of State for Work and Pensions, Thérèse Coffey MP.
The setup sees AWV acting as a go-between employer, handling all the payroll, HR and administration support attributed to the 6-month work placements. It’s considered to be a win-win for both parties. For the candidate, they receive a mentor all the while developing their skills further and increasing their potential employment opportunities post-placement. For the small business or sole trader, they're able to fill any immediate holes within their team while also gaining new perspectives and/or developing the hard and soft skills of their firm which can be attributed to adding a younger demographic to their task force.
Country Head for the Adecco Group UK and Ireland Alex Fleming comments, “It’s more important than ever that we act now to avoid a long-term impact, which is why the Kickstart programme is so invaluable, as it is a strong solution for getting young people into the workforce. Additionally, gaining first-hand experience from small businesses will not only help to equip them with technical skills but also soft skills that will be integral for future success.”
For more information or to apply click HERE
Another sigh of relief was felt across the small business sector last week with the news of a further extension on the commercial landlord eviction block for shops, bars and restaurants across the UK.
The three-month extension means that commercial landlords are now unable to evict small businesses from their tenanted premises until the end of March 2021. It comes after the initial extension took the block from September 2020 to December 2020. And now, with the country still amid the coronavirus pandemic and the three-tier restriction system in play, the extension comes as some welcome relief for many small businesses who are struggling to meet their rental commitments.
“This support is for the businesses struggling the most during the pandemic, such as those in hospitality, however, those that are able to pay their rent should do so,” said Robert Jenrick, Secretary of State for Housing, Communities and Local Government.
Behind the extension, is the plan that businesses and landlords will use the time wisely to hash out a plan for the repayment of rent that is currently in arrears.
“We are witnessing a profound adjustment in commercial property. It is critical that landlords and tenants across the country use the coming months to reach agreements on rent wherever possible and enable viable businesses to continue to operate,” said Jenrick.
Currently, the British Property Federation has estimated that there is £4.5bn owed on commercial property rent.
CEO of the British Independent Retailers Association (Bira) Andrew Goodacre commented that, “Bira is delighted by the decision to extend the rent moratorium. We have been asking for this because of the challenges faced by independent retailers on the high street. We hope this leads to constructive discussions between tenants and landlords to find a positive solution when the moratorium ends in March 2021.”
Small business confidence has slumped further during the third quarter, with the Federation for Small Businesses (FSB) Small Business Index falling to -32.6, the second-lowest reading on record. The drop was experienced throughout the UK, with all regions and counties recording a negative index number. Wales expressed the least amount of confidence with a score of -71.6%, while London was the most confident with a score of -25.8.
A summary of the key findings includes:
“Only by resolving business support shortcomings, striking pro-business trade deals and enhancing our Covid-fighting efforts can we hope to end this extremely concerning run of negative SBI readings and return to optimism once again. Our economic recovery and future growth in a world permanently changed by this pandemic will hinge on the success of the small business community. Every policy decision from here on in should be carefully assessed for its potential to spur start-ups, encourage business investment and drive commercial innovation,” commented FSB National Chairman Mike Cherry and National Vice-Chair, Policy and Advocacy Martin McTague.
For more information or to read the report click HERE
In last week’s blog, we looked at two ways that, as small business owners, you can leverage the online world for some low-cost or no-cost digital marketing power. We started with the holy grail really of the online world – your website, and getting it optimised for search engines (otherwise known as SEO) via keywords. So now, let’s dive straight into another couple of tactics for some do-it-yourself online marketing for your small business.
It’s been a pretty crazy year really for anyone out there running a small business, be it in the UK or around the globe. For many, it’s been a struggle just to keep their business-head above the water while some, may have been forced to pivot what they do or what they offer. Others may have gone into a period of dormancy, looking to reduce their costs and expenditure any which way they can. If this last category is where you find your company at, you might have looked towards your marketing and advertising budget as a place to cut costs. And that’s okay – you have to do what you have to do.
But just because your marketing budget has been reduced, doesn’t mean you should forget about this department 100%. There are many actionable marketing tasks which you can do yourself that are either free or require minimal budgets. So many in fact, that over the coming weeks I’ll break this blog topic down into parts. And so here we here, Part 1 of Do-It-Yourself Online Marketing for Your Small Business.
Stayed tuned for next week when we look at some more low-cost or no-cost marketing focuses you can do for your small business.
In the latest report on Employment in the UK to come from the Office of National Statistics (ONS), figures show that the number of self-employed people within the UK has decreased. The change from this time last year is 5 million people with a status of self-employed, to now 4.5 million. Women workers registered the greatest decrease, with a reduction of 99,000 – the biggest number ever recorded.
The same trend is also being experienced for the number of part-time employees, with numbers that have decreased to 8.11 million. This is down 158,00 on the quarter.
At the other end of the spectrum, the number of full-time employees has increased on the quarter by 113,000 - hitting a record high of 21.17 million. This time, woman workers registered the greatest increase, setting a record high of 165,000 to make a total of 8.72 million.
Interestingly, there was a big shift from the status recorded by people. In the survey, people select from “self-employed” or “employee”. A major factor in the decrease noted of self-employed people can be attributed to a change of their status to an employee. This figure also hit the highest number ever recorded of 277,000.
Could this shift of employment classification be deemed a flow-on effect from COVID-19? As more people move to the more “secure and stable” option of being employed directly with a company as opposed to the unprotected and possibly more vulnerable nature of self-employment?
Mike Cherry, Federation of Small Businesses (FSB) National Chairman, comments that, “Our self-employed community was fundamental to our recovery from the last recession. If we want it to play that same role again, policymakers must do more to support it.”
“Too many independents are falling through cracks in the current business support landscape – not least new business owners, sole traders earning more than £50,000 and company directors – that urgently needs to change if we want more people to take the start-up plunge and become the employers of the future,” noted Cherry.
For more information or to read the report click HERE
And so here we all are again – the second round of coronavirus restrictions. Until Wednesday 2 December, England has moved into its second COVID-19 lockdown, with restaurants, pubs and non-essential stores shutting up shop and the general public being told to stay at home.
It’s a scene that's been a common occurrence across the globe, with many countries responding to their COVID-19 secondwave increases in much the same way as England is now rolling out.
In Australia, our southern state of Victoria has just finished their second lockdown, after peaking in early August with more than 700 new cases a day – the worst numbers seen anywhere throughout Australia. And although the numbers may be different when you compare Australia to England, the effects on the economy, on businesses and on individuals is the same.
With zero new COVID-19 cases recorded in Victoria for multiple days in a row, there is light at the end of the tunnel for any community, state or country who finds themselves staring down the barrel of restrictions, constraints and controls. In Victoria, lockdown restrictions have been lifted. Retail stores, cafes, bars and restaurants have all been able to open up again. The 25km radius travel limit has been revoked and outdoor sports for under 18’s is on again, as is non-contact sport for all ages.
And with Christmas and the New Year season just around the corner, it seems the time is now for England.
Professor of infectious disease epidemiology at Edinburgh University, Mark Woolhouse comments, ”In exchange for us giving up our freedoms, the government actually has to do something to make sure we don’t have to do this again.”
“The worrying thing about that scenario is that it also forecast that there would be a third wave early next year. Now I am not predicting a third wave, but I most certainly cannot rule it out. And if there is a third wave in another few months followed by another lockdown, I would be very concerned about people’s compliance with it on a third occasion. In essence, this is the government’s last chance to get its act together.”
“Helping businesses to survive and thrive beyond COVID.” This is the name of the game for the Small Business Leadership Programme, which is being led by the Department for Business, Energy and Industrial Strategy and the Small Business Charter. A fully funded government initiative, the programme supports senior leaders via a practical learning environment, helping them to further develop the skills needed to deal with the current economic instability and uncertainty due to COVID-19.
“The Small Business Leadership Programme will help to equip small business leaders with the leadership and problem-solving skills they need to grow their firms in the wake of this pandemic,” commented Paul Scully, Parliamentary Under Secretary of State in the Department for Business, Energy and Industrial Strategy.
Running for ten weeks, the programme is designed to be able to fit into a normal, full-time work schedule. Consisting of eight, 90-minute webinars, participants are also required to complete 2 hours of independent study and peer-supported learning each week. The webinars are delivered by a range of experienced and internationally acclaimed business schools including London Metropolitan University, Manchester Metropolitan University, Leads Business School, Coventry University and more.
The programme curriculum covers:
Executive Director of the Small Business Charter, Anne Kiem OBE, comments: “The effects of COVID-19 have been particularly damaging for small businesses and providing their leaders with the experience and knowledge to survive and thrive will be essential following the Coronavirus pandemic. While cash injections are important, for the long-term, business leaders will also need guidance to ensure they remain resilient and can continue to grow throughout this period and beyond. Accessing experts from the world-leading business schools we have in this country will be an essential resource for businesses in the months and years to come.”
For more information on eligibility click HERE
“Lockdown has posed challenges and difficulties for so many businesses, and we have constantly been looking at agile and effective ways of helping brands to stay connected and closer to their customers,’ comments Director of Commercial Sales and Partnerships at ITV, Mark Trinder. What he’s talking about here is the collaboration between ITV and NatWest and their £150,000 TV ad prize for small businesses. Now more than ever, businesses need to stay connected to their customers. But it doesn’t have to be all TV advertisements and expensive billboards. Here are 3 simple ways to keep connected to your customers in the times of COVID.
The government-backed emergency coronavirus funding has been a major lifeline for a lot of SMEs throughout the UK. With so many businesses applying for these incentives, it’s no wonder really that there has become a little bit of a backlog when it comes to the processing of all the applications. And as staff and employee numbers being kept at a minimum, it means there are fewer hands on deck, so to speak, to push through all that paperwork.
So, it seems, we’re now faced with a financial services landscape that is pretty much closed to all new businesses. Those SMEs that might be thinking of opening up a new business bank account with one of the major, high street banking rollers, will have to think again.
At the time of writing this blog, only Barclays is open to new business, with a caveat that as they are experiencing a higher than normal demand, the application processing is taking a lot longer than normal. But at least it’s a possibility.
Take Santander, TSB, and RBS/NatWest for instance; all three banks have put a stop to any new business bank accounts being opened. This in turn means that they’re able to focus what manpower they do have, on supporting and serving their pre-existing customers.
Looking more specifically at HSBC, they closed their new business bank account applications on 30 September 2020 and are currently only accepting new applications for the government-supported Bounce Back Loan Scheme from businesses which already have a HSBC business account. “As one of the only banks that remained open to applications from all UK businesses since the [Bounce Back Loan] scheme’s launch, we received a huge level of demand. With the scheme closing on 30 November, we need to focus our resources on fulfilling existing applications,” said a HSBC spokesperson.
Opening on 1 November 2020 and running for a period of 6 months, the UK governments Job Support Scheme will come as a glimmer of light for many SME’s throughout Britain. It comes as an answer to COVID and in response to the winter trading figures. Normally, for many businesses, they would see a decrease during the country’s cooler months, regardless of there being a global pandemic thrown into the mix as well.
It's designed to keep employees on the books; with a business responsible for paying employees for the actual time they have worked, and then the remainder of hours which an employee has not worked, being spilt in threes between the employer, the Government, and the employee (through a reduction in wages).
And the news couldn’t be welcomed enough by National Chairman Mike Cherry of The Federation of Small Businesses (FSB). He warns however, that more support should also be planned for those who may be falling through the cracks of this Job Support Scheme.
Cherry comments that, “These new measures will bring some hope to those businesses which are still bearing the brunt of restrictions, six months on from the first lockdown, and are likely soon to have further restrictions expanded to include them.
We now need to look at what comes next in terms of further evolution of support mechanisms, especially for those who will not directly benefit from today’s announcement. With thousands still struggling to access bounce back loans, the Treasury should now be looking at what succeeds emergency loan schemes to ensure that banks keep lending to small firms beyond the end of this year, thereby stimulating the real economy.
While support is being more closely targeted at certain kinds of businesses, we must be alert to suffering right the way down supply chains. Start-ups and sole traders were fundamental to our recovery from the last recession. If we want them to play that role again we have to pull out all the stops to support them.”
For more information on eligibility criteria for both employers and employees, click HERE
2020 certainly has been a crazy year; and there are still a few months left. While things aren't really getting any clearer, it’s our mental health which often takes a bit of a battering during these uncertain times. Feelings of concern, confusion, and anxiety can become more prevalent across the board, be it in our home life, or within the workplace.
But with clear communication, those feelings can be alleviated. Read on below for 4 tips for keeping communication lines open in the workplace.
After some pretty low-lows when it came to business confidence in 2020’s Q1, there's a definite sigh of relief to see that things went up for Q2. The Federation of Small Business (FSB) has just released its Voice of Small Business Index Q2 report, and it shows that the small business confidence (SBI) level is now sitting at -5.0. While still in the minus range, it’s the highest it’s been since Q3 2018.
Here are some of the Q2 high-level statistics from the report:
It was the construction industry, along with the accommodation & food, and the manufacturing industries that experienced the most confidence during Q2. In comparison, the arts, entertainment and recreation industry, plus information and communication, and the retail industry were at the other end of the spectrum, reporting to be the least confident.
On the location front, London SMEs felt the least confident, with a SBI score of -25.6, followed by Wales and the south-east at -14. The most confidence was the north-west, with an SBI score of +45.
“The remainder of the year will be characterised by government efforts to keep the virus under control while supporting economic recovery,” said the Centre for Economic and Business Research’s Director and Head of Macroeconomics, Nina Skero.
For more information or to read the report visit HERE
In the latest round of COVID-response efforts to help businesses, the UK government recently announced a three-month extension on the commercial tenant eviction ban which is currently in place. The ban, which originally came into play in April of this year, had an initial end date of September 30. But amidst this ongoing pandemic saga, and given the fact that shopper and consumer numbers are down and many retailers and restaurants are still struggling hard, comes the latest lifeline cast out for businesses to grab hold of.
Secretary of State for Housing, Communities and Local Government, Robert Jenrick has said that extending the commercial tenant eviction ban for another three months would allow UK businesses to “focus on rebuilding their business over the autumn and Christmas period”, but that “where businesses can pay their rent, they should do so." The extension has come under fire from some landlords in regards to commercial businesses who are maximising the opportunities to not pay their rent when really they can be.
Chief executive of the British Property Federation, Melanie Leech, comments that, “the moratorium . . . must come to an end as well-financed businesses have been exploiting the government intervention to avoid paying rent when they are indeed able to pay, and this puts at risk our sector’s ability to support vulnerable tenants.”
It's estimated by the hospitality trade association UKHospitality that there is currently £760m worth of rent owed to landlords which is outstanding. And by the time it comes for the next quarter's rent payment, September 29, it’s expected that this figure will sit at £1.06bn. Given that commercial tenants are expected to repay these owed sums, landlords are calling for the eviction ban to be lifted as per the original end date, and not to see it extended.
It’s business as usual for this year’s National Apprenticeship Awards; well, with a slight change I suppose. This year the ceremonies are going digital, as they are broadcast online for the first time ever in their 17 year history.
Regardless of the sector or industry, all employers and apprentices are invited to enter the awards, which aim to shine a spotlight on the success stories behind both apprentices and their employers across the UK. With categories that include both employer of the year and apprentice of the year, the time is now to get your entries in. The nomination period runs from 1 to 25 September. Nine regional ceremonies are scheduled to be held between 2nd and 6th November followed then by the national ceremony which is locked in for Wednesday 25 November.
Last year the awards got a staggering 1,218 number of entrants from 414 towns and cities across the UK.
“It is important that we continue to recognise the employers of all sizes, apprentices and those who champion apprentices during this unprecedented time. We are excited to announce that for the first time, the winners and highly commended will be announced at regional and national virtual ceremonies. This will allow an even wider audience to celebrate the success, commitment and investment in apprenticeships, and the impact they have. I am personally very much looking forward to being part of these exciting new online ceremonies,’ commented Peter Mucklow, Director of Apprenticeships, Education and Skills Funding Agency.
The Employer of the Year categories for the 2020 awards include:
And the Apprentice of the Year categories include:
For more information visit HERE
The ingenuity of people never ceases to amaze me. How, from forbidding circumstances such as COVID, new business ventures sprout. And they show us new signs of life, and new ways of doing things. Thinking outside the box, as humans, we really can excel. Whether it be because of COVID or even just because of market or industry changes, I love learning about new companies that show how adept we are at quickly changing the way we do things, the way we run our businesses, and the kinds of services that we offer.
An excellent example of this is the new Swedish digital supermarket Livfs. Different from any ordinary brick and mortar supermarket, Livfs may still have a presence in the physical world (yes, you still walk into the store), however there are no shop attendants or cashiers at the checkout or to help you pack your bags. To do your shopping from this digital supermarket you’ll need to jump onto your smartphone and log in with BankID (a national identification app which is run by Sweden’s banks). Then with a tap on your screen, you’ll be able to unlock the glass door allowing you to enter the supermarket. Shoppers are supervised by camera as they peruse the shelves. To purchase, you simply find your products, use the app to scan the barcode, and tap another button on the app to pay.
The Livfs chain of digitally-driven supermarkets came about as an answer to small rural towns (with populations as little as 400) throughout Sweden who over the years have seen their supermarkets shut up shop because they weren’t financially viable. With the current Livfs business model, the stores are open 24/7 and one employee is responsible for ordering, re-stocking, and maintaining the container-housed store.
Livfs currently has 19 stores dotted throughout rural Sweden, but they aim to soon have more of them. And who knows, as an answer to COVID regulations and restrictions, perhaps this model will be adopted for other retail businesses too. Only time will tell I suppose.
COVID-19 has and is reshaping our world in many different ways. Whether it be the way we interact with one another, how we shop, or how we work – the changes are many. Fast-forward to whenever it will be that things settle down (be it vaccinations or eradications), and one does wonder what of these new ways of life will be here to stay?
Findings from a recent survey of 1,000 businesses across the UK, conducted by the UK telecommunications service provider Onecom, show that many businesses are seeing the benefits of flexible and collaborative workspaces when compared to the standard one-business office style set up.
“There has been a move towards more flexible and collaborative working for many years now, however its clear to see from this study that the impact of the Coronavirus and the lockdown has sped up this process exponentially. Many of the managers that we work with, who were perhaps a bit apprehensive about what it would be like to manage employees remotely, are telling us that they’ve found working from home remarkably easy and enriching for their teams. The real thing that people are missing is the face-to-face interaction and many businesses are now waking up to the fact that you don’t necessarily need a fulltime office for that,” said Onecom’s Operations Director Helen Myers.
A summary of the survey results include:
It was only last week that I was writing the words “Recession Recession” in my previous blog post, amid statistics showing the UK economy plunging 2.2% in Q1 and a further 20.4% during Q2. But now, some new statistics that show the retail sector on the rebound, on the rise. It seems so quick, so can that truly be a light we see shining at the end of the recession tunnel?
Latest figures from the Office for National Statistics (ONS) for the month of July show that retail sales are up. And not just slightly up. They increased by 3.6% from June’s numbers. Also encouraging is the fact that they surpassed the same month's figures from the previous year too.
And the word on the street is that this trend is continuing throughout this month of August. The Purchasing Managers’ Index (PMI) data for August, which takes into account most industries outside of retail, is showing promising figures indeed, amounting to the highest levels yet since October 2013. Spurred on by an easing of COVID-19 lockdown restrictions and an encouragement for consumers to “get out and spend.” Take for instance the UK governments “Eat Out to Help Out” campaign, which entices people to enjoy a meal out at registered businesses by giving diners up to £10 off the price of a meal when enjoyed between Monday and Wednesday.
But one does wonder how long the government can realistically provide these financial aids and assistance initiatives that give the UK economy a leg up and push in the right direction. State debt has just hit the £2tn mark for the first time ever.
“Today’s figures are a stark reminder that we must return our public finances to a sustainable footing over time, which will require taking difficult decisions,” commented Rishi Sunak, Chancellor of the Exchequer.
Does the definition of “debt” include statutory interest? HMRC would have said so. Their argument relied on the context of section 17 of the Bankruptcy (Scotland) Act 1985 to be read in the context of section 51. Unfortunately for HMRC, the argument failed, and their appeal against a decision to recall a sequestration of VCY under the Act was rejected by the Civil Division of the Sheriff Appeal Court. The ruling means that a sequestrated debtor looking for recall of sequestration on the ground that they can pay their debts in full do not have to pay interest for the subsequent period on the sum due as at the date of sequestration.
VCY was originally sequestrated in March 2016 on the petition of HMRC, with the date of sequestration being 10th December 2015. The petition debt was £17,377.58 plus interest. On top of that, there were expenses of which VCY were liable for to HMRC. VCY applied to the Accountant in Bankruptcy (AIB) in July 2018 seeking for a recall of the award of sequestration on the basis that he was able to pay his debts in full, which he subsequently did in an attempt to settle the claim. The application was intimated to HMRC but they refused it, stating that statutory interest must be paid in order to secure a recall of sequestration. They claimed that VCY had no intention of paying the statutory interest on the debt in terms of section 51 (1)(g) of the Act. The AIB then applied to the Sheriff Court for a recall of sequestration, as they did not consider HMRC to be entitled to statutory interest.
It was considered significant by the Sheriff that section 17 of the Act made no express provision for the inclusion of interest. It was noted that the power to grant recall was one of discretion, and it was thereby held that it was only on distribution under section 51 of the Act and in certain circumstances that would warrant a creditor receiving statutory interest.
On appeal, HMRC argued that, where use of the word “debt” in section 17 of the Act is read in the context of section 51, it transcribes as a requirement that a debtor make payment of his debts in full. As such, it must properly be viewed as requiring creditors to receive payment in respect of all the debts for which they are entitled to rank in the sequestration. This included the payment of interest on ordinary and preferential debts (which is itself a debt in terms of section 51 (g)).
The opinion of the court was that section 51 was applicable to a situation rather different to that envisaged by section 17. Furthermore, the various classes of debt in section 51 were dissimilar from interest payable thereon. “Debt” was used in different senses in different provisions in the Act. It would have placed HMRC in significantly better position than they would have been in if the sequestration had not been awarded in the event that there was a requirement of paying interest to, say, the date on which HMRC received payment of the sum due. And so, there you have it – “debts” in section 17 did not include any interest accrued from the date of sequestration.
Two consecutive quarters in which figures decline is all it takes for the word recession to be thrown when describing a social state and economy.
And so it plays out; in the first quarter of this year, the UK’s economy diminished by 2.2%. In the second quarter, it plunged a further 20.4%.
"This is the largest quarterly contraction in the UK economy since Office for National Statistics (ONS) quarterly records began in 1955, and reflects the ongoing public health restrictions and forms of voluntary social distancing that have been put in place in response to the coronavirus (COVID-19) pandemic," a representative from the Office for National Statistics (ONS) recently said in a statement.
But Britain is not alone. Although it is one of the most aggressive declines in western economies, it’s not a surprise or an anomaly among the results. The US also entered into a recession with a combined GDP drop of 10.6% for Q1 and Q2. In Australia, although figures have not officially been released yet, it goes without saying that the word recession is looming on the horizon. In Q1 the GDP shrunk by 0.3%, and in Q2 it’s very much expected that figures will show a further decrease.
Some other key statistics from the UK's ONS report show:
With the end of the UK government’s job retention scheme not too far off (at this stage it will be all wrapped up by the end of October), there are undoubtedly more tough times ahead. The £1,000 bonus which is promised to every furloughed employee that a company employs and keeps paying until January 2021 may offer some respite, however, it’s uncertain how many businesses will be able to leverage this support option.
"The furlough scheme has succeeded in preserving millions of jobs. However, with firms continuing to face a perfect storm of increased costs, reduced demand, and diminished cash reserves, unemployment is likely to surge as the Government support schemes wind down unless action is taken," commented Suren Thiru, Head of Economics at the British Chambers of Commerce.
Having previously been relegated to unsecured creditor status by the Enterprise Act 2002, as of 22nd July 2020 HMRC has restored its status as preferential creditor in insolvent liquidations. This puts them near the top of the statutory hierarchy for repayments, thanks to the Finance Act 2020. When a company goes into administration or liquidation after 1st December 2020, HMRC is now a priority creditor to pay. However, their move up the rankings may have recreated an issue for many small businesses across the UK – so why has the Government taken this action, and what does it mean for unsecured creditors?
In cases of insolvent liquidation, employees are currently the only type of preferential creditor. As of 1st December 2020, HMRC will join them as secondary preferential creditors. The effect this will have for unsecured creditors is undesirable to say the least, as it causes their status to further be displaced. Nevertheless, being a secondary preferential creditor means that HMRC are only preferred creditors regarding certain types of taxes, including PAYE and VAT. As for corporation tax and other taxes owed directly by a company, HMRC remain unsecured creditors.
The consequence of this change means that Treasury takings are reportedly set to rise by £185 million a year. It may, perhaps, come at too high a cost for many SMEs that make up the majority of unsecured creditors in liquidation. HMRC’s new status of higher ranking means that they will now use up some of the funds that previously would have been shared equally among unsecured creditors, causing a ‘ripple effect’ to other suppliers. It is, therefore, a strong possibility that some businesses in the supply chain will suffer from a financial decline.
In addition, lenders with floating charges may increase the cost of business borrowing as a way to deal with a reduced security value. Whilst it is more than likely that they will request a personal guarantee from directors to support the lending to their companies, it is rather unlikely that directors will feel prepared to provide one at such a time of uncertainty, since many companies are facing trading difficulties and ill prospects on emerging from lockdown.
As a result of restricted access to finance, the expected rise in the number of business failures and increased redundancies will certainly cause a stunt in business growth. There lacks certainty on whether HMRC will offer as many Time to Pay (TTP) arrangements for businesses that are struggling to pay their taxes. Indeed, many business groups have described this policy as a threat to business lending and business rescue. Duncan Swift, president of the insolvency and restructuring trade body R3 stated: “The return of HMRC’s preferential status in insolvencies is a badly-timed and ill-considered blow to the UK’s enterprise culture. It will damage business lending and business rescue, and will affect jobs, livelihoods and the economy.”
Last week we touched on tactics you can employ to make sure people know your business is back open and trading post COVID-19 lockdown. While it’s one thing to let your customers know that you’re open for business, it’s another thing to get them through your doors and spending again. So, this week, we’re looking at “3 Ways to Help Get People Spending Again COVID-19”.
While the reopening of some businesses may have been postponed, many lockdown restrictions have already been lifted as businesses across the UK are allowed to resume normal trading. While opening the doors is one thing, getting customers to flock through them is another.
On one hand, there will be many people who seemingly won’t be able to wait to step foot back into shops and venues. But there will also be a percentage of people who are a little more cautious about it. How do they know that you’re doing all you can as a business to keep customers safe and minimise any potential risk?
I was enjoying a coffee the other day in my local café and immediately picked up on the fact that some of their chairs were not positioned to meet the 2m distance rule. And I can’t say that it left me feeling confident.
So how can you assure your customers that you’re taking things seriously when it comes time to reopen your business? Here are three easy ways to let your customers know your business is up and running and good to go:
Rebuilding after COVID-19 is the name of the game when it comes to the UK Government’s The Sustainable Innovation Fund. Led by Innovate UK, and comprised of a total of 3 rounds, the grant competition is open to UK registered businesses and invites them to apply for a share of up to £55 million. Available for new projects which focus on sustainable economic recovery post coronavirus, projects must demonstrate how the adverse results of COVID-19 can be resolved by your projects proposal as well as addressing the factors of climate change and/or environmental sustainability.
Any UK registered business who has faced/is facing difficultly as a result of COVID-19 can enter the competition. Eligibility criteria include:
Small or micro-businesses are exempt from these criteria however unless they are already involved in insolvency proceedings, have already received rescue aid which they have not yet repaid, or are already part of a state aid restructuring plan. Sole traders are ineligible to apply for the grants. Likewise, academic institutions and research and technology organisations (RTOs) are not allowed to conduct their project work alone, they must collaborate with another business or organisation.
Project costs must be between £100,000 and £500,000, which each business working separately or in a joint partnership with another organisation can only claim up to a maximum of £175,000.
The competition’s first-round closes this Wednesday, the 29th July at 11:00 am and applicants will be notified of the results by 28 August 2020.
For more information and for all the details, visit the UK Government’s website HERE
As lockdown begins to ease in the UK, businesses are slowly beginning to reopen their doors to customers for the first time since March. But the economic impact that COVID-19 has caused on the UK’s economy is profound. The Chancellor told the House of Lords Economic Affairs Committee that the UK was facing a “severe recession the likes of which we haven’t seen”. Industries are trying to recover the lost costs but it may take years before we complete the path to full economic recovery.
It should therefore come as no surprise that cashflow concerns and trading uncertainty remain the pivotal source of anxiety for many directors. UK businesses’ cash generation has remained low heading into the cash crunch triggered by the pandemic, with smaller businesses being hit hardest. Research conducted by BDO LLP reported that, for smaller businesses, sales converted into free cashflow stand at an average rate of just 2.5%. This is compared with the largest 100 companies in BDO’s research boasting annual turnovers of more than £3bn – with a much healthier average rate of 9.6%.
A low level of free cash generation is undeniably putting extreme pressure on businesses throughout the UK, forcing many to temporarily close their doors, which in turn causes unpaid invoices to stack up. So, what can businesses do to fight the unexpected downturn? Some of the main steps that can be taken to improve cashflow include:
BDO’s Business advisory partner Mark Lamb commented: “Maximising cash generation has always been vital and is one way to help protect a business in an unexpected downturn. Every business should now be looking at what it can do to grow and maintain its free cashflow.”
“To survive this crisis, you need good cashflow. Improving that cashflow, in these conditions, is harder but achievable.”
Thus, the director carefully scrutinises their cashflow forecasts, but unfortunately, he or she has concluded that it’s no longer viable to continue with trading. The company becomes insolvent and enter an administration process (or is liquidated). What now?
It’s important that directors keep mindful of unfair preferences and understand the provisions of the Insolvency Act 1986, namely Section 243. An equitable distribution of funds during insolvency is required by this piece of legislation – it ensures that no unsecured creditors are given preferential treatment at the expense of any others. An unfair preference could be created if the creditor is a ‘connected party’, e.g. a family member, friend or employee of the board. There may also be a vested interest in ensuring that certain creditors are paid prior to declaring insolvency.
The company liquidator will analyse payments that have been made within six months of entering insolvency. If he or she finds that an unfair preference transaction is suspected, action may be taken to recover it. Directors could face personal liability for some, or all, of the company’s debts if an unfair preference is found to have been made.
In some instances, a transaction like this may be obvious when checking through the bank accounts, but it’s important to remember that it isn’t always clear cut.
Social media – it’s no longer a question of if your business should have a social media presence. The question these days is more along the lines of which social media platforms you should be utilising. And really, there are so many these days. But you don't need to worry about being across all of them. What is more important is to be strategic with the platforms that you do use. To make sure you are on the right ones that get you in front of the right people.
Consider your target audience and who you are trying to reach; what platforms do they use? Think about what is the purpose and intent of your social media activity. Do you simply want to strengthen your brand presence? Or maybe you want to use the platforms to get feedback from your customer base and find out more information about what they do and don’t like. Maybe you want to run competitions, or maybe you want to use it as a communication channel for potential customers to ask you questions. It’s entirely up to you. But making sure you’ve first given it some forethought and have a strategy in place will help you to get the most out of the platforms, making it an efficient use of your company's time.
Here is a quick summary of the main social media platforms as they stand today and the demographics of the potential audience that you can reach.
Late payments. It’s been a hot topic on the agenda for many SMEs and governing bodies for a long time now. The UK government originally put forward a raft of late payment reforms in June 2019 including fines and binding payment plans. Still, there has been no major forward steps in implementing any of these since. “I accept that publishing reform proposals is taking longer than originally hoped… as soon as we can we will address this issue at pace,” commented MP Olivia Bloomfield.
And now, The Federation of Small Businesses (FSB) has just released their latest report, “Late Again: How the coronavirus pandemic is impacting payment terms for small firms.” It looks at how COVID-19 has affected small businesses when it comes to the late payment problem which the UK SME industry endures a constant battle with.
Here’s a quick snapshot of some of the high-level findings and statistics:
Mike Cherry, FSB's National Chairman comments, “Before the COVID-19 outbreak struck, many small firms were already under immense financial pressure because of late payments. With cashflow drying up as the lockdown took hold, this situation has worsened. Sadly, some unscrupulous corporations are trying to inoculate themselves from the impacts of COVID-19 by withholding payments, or even freezing them, at the expense of small businesses.”
“If the small firms that make-up 99% of our business community are to play the fundamental role we need them to in ending this recession, this behaviour must stop. The Government promised to act a year ago. Time is running out – we need to see delivery.”
For assistance with the recovery of sums due, please speak to your usual contact at Chamberlain McBain or email us at email@example.com.
Re-opening, but safely. That’s the name of the game as the UK government relaxes the COVID-19 social distancing rules. And while prime minister Boris Johnson does lay down that fact that all these steps are "reversible", the government’s chief medical adviser, Prof Chris Whitty, says that the easing of the lockdown rules and restrictions represents a "reasonable balance of risk".
Here is a summary of the different rules and different regulations across the UK:
Teamed with this easing of restrictions comes the government's guidance and support for businesses in terms of how to effectively, and safely, return to trading. Their Working Safely During Coronavirus website page is full of information for businesses explaining the practical steps that should be taken to ensure a safe workplace is maintained during the coronavirus pandemic. It’s broken down into many sections, relevant to the industry your business is operating in, and the type of work as well. These include:
For more information, visit the UK government website: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19
Everyone and anyone who either works for or runs a business knows how important it is to be online. Having a functioning and informative website is a must. However, making sure that the website can be found too goes hand in hand. What's the use of spending time and money on building a website to have no one visit it? And now with COVID-19, even if you’re not selling products direct to a market, a website helps you to stay visible in an online capacity when people are not out on the streets in a physical one. As Dr Christopher Dayagdag so eloquently said, a “website without visitors is like a ship lost in the horizon.”
I had an interesting experience the other day when I was trying to find a company online that I knew existed in my local community. I wanted to find out more information about them and the services they offered. I Goggled them using the name of the company – standard for how any potential customer is going to find a business if they already know about them. But, I couldn’t find their website. I was getting some results for their business listing through sites such as Yellow Pages and other local search engines. But nothing that actually linked me to their official site.
Turns out the name of the company was not the name of their website URL. This can happen dependant on URL availability etc. But there was no reference to the original name of the company listed on their site anywhere; the one that is on their building, that their staff wear embroidered uniforms displaying, and that their cars are sign written in. Literally, There was nothing linking them together at all. Maybe this is a new name change and they haven’t had time to update things? No, the website was built in 2017. They’ve been known in the community as the original name now for a lot longer than that.
Being online is one thing, and it’s a very important one thing. But being able to be found is equally as. A website is a business’ calling card, a virtual front door. But no one can get to that front door if there's no direct path to it; a crucial factor to remember for any business owner.
Late payments are crippling to any business, let alone if you’re a small business. From paying staff to paying suppliers, rent, taxes, and all the other outgoings; small businesses rely more than ever on the money coming in so the money is there to go out. The onslaught of COVID-19 has bought many extra challenges for businesses across the world, and it's no surprise that it seems to have only exemplified the problem of late payments for some.
“Many small suppliers have seen their payment terms lengthened or cashflow held up as their big clients try to insulate themselves from the impacts of Covid-19,” said Federation of Small Businesses National Chairman Mike Cherry.
In a good news story, it’s positive to see supermarket giant Morrisons is extending their immediate payment policy to smaller suppliers for an additional three months. Applying to approximately 3,000 small suppliers (which includes 1,750 farmers), it was in March that they first announced that they would be making sure they make faster payments to the little guys to ensure they support strong cash flow channels where they can. The policy which is now extended to September applies to those SMEs who supply food and products direct to Morrisons with a value of up to £1m in turnover.
“It’s refreshing to see a large company like Morrisons championing prompt payment during this national emergency by extending its promise to pay small suppliers immediately,” said Cherry.
Chief Executive of Morrisons, David Potts, further comments, “Small food makers and farmers have helped us to play our full part in feeding the nation. They have told us they face continued financial pressure and we want to be there for them during this challenging period.”
If your business is struggling with late payments or is in need of assistance with debt recovery, Chamberlain McBain can help. For more information, or to start a conversation, contact us today: Click HERE
Whether it be our personal lives or professional, stress is inevitable; it’s a daily factor in our lives. Dealing with all of the moving parts of life can certainly be a juggling act and keeping your calm when things pop up unexpectedly can sometimes be tough. Creating the perfect work-life balance is something that we all strive to achieve, and not letting potentially stressful situations throw you is key. Here are some strategies that you can utilise in the workplace that will help you to manage your stress levels when situations arise that may just be a little out of your control.
Minimise the reduce interruptions – Interruptions are part and parcel of a standard workday. Plan all you may, but things pop up. Some interruptions may be out of your control, and it’s important to recognise which ones are and which ones aren’t so that you can control your reaction to them. Accept the disruption when it happens and if it needs to be dealt with urgently then act on it straight away. However, if it’s not urgent, add it to the list of things that you need to achieve, but then carry on with the original task you were working on. Keeping on track helps to reduce the loss of focus, minimising a potentially stressful situation.
Keep your workspace clean and organised – They say a cluttered desk is the sign of a cluttered mind, so try to keep your workspace as clear, clean and organised as possible. Designate a place for everything so that things can be put away or filed as and when is needed. This will help you to feel more like you’re on top of things and less overwhelmed.
Keep focused and complete things one at a time – In some situations multi-tasking is great but at other times it may lead you to feel a little bit frazzled and all over the place. If you spread yourself too thin and don’t give your full attention to what you’re working on at the time, it’s more likely that you’ll make mistakes. You then may have to spend time going back over things or re-doing work down the track which can add fuel to the stress-fire.
Last week the Federation of Small Businesses launched the New Horizons report – a policy report looking at how COVID-19 has affecting UK small businesses, and how they are manoeuvring through these tricky times.
Small firms have long been the champions of innovating, adapting and engaging with others, especially during difficult periods," commented National Chairman of the FSB Mike Cherry. Let’s face it, COVID-19 can definitely be considered as a difficult period.
The New Horizons report looks a variety of different topics such as the role small businesses have played in their community during the COVID-19 pandemic, thier digital engagement, how they’ve diversified through new service or product offerings, and how their business practices and processes may have changed. It also talks to notion of recovery, highlighting innovation, the relaxing of rules and regulations, and a focus of research and development as being key factors to help businesses come out of this pandemic stronger and better than before they went in.
A summary of the key findings and statistics include:
For more information visit HERE.
Whether it be for your personal development, to further your career, or to upskill in a way that provides extra qualifications and knowledge to a business, study is so much more accessible now than it ever has been before. From the comfort of our own home, we can develop and broaden our skill base in pretty much any area that we fancy.
UK Learns is a new online platform that delivers a wide range of multi-skill based courses to anyone who is up to learn. From hard-skill courses such as cloud computing and equity finance to soft skills such as professional resilience, self-management or how to become “career smart”, the opportunities for development and growth are varied.
Choose from a range of industry-specific courses, from those that are free or that have time commitments of one hour to ten hours, or those that can be completed online anytime or that have scheduled class time – the online course-world is your oyster. If you’re not sure what course would benefit you the most, however you are keen to learn and to put some of the extra time you may currently have up your sleeve to good use, UK Learns also offers a short quiz that can help you to figure out what might best suit.
Delivered in conjunction with Pearson, a global education and learning company, many of the courses offered are accredited and are ones that will undoubtedly stand you in good stead with any current or future employers. Being able to make sure of these unique isolation times that we find ourselves in and do something that contributes positively towards both our overall mental health as well as professional outlooks can only really be a win for all.
It’s crazy to think that for many of us across the world, the Coronavirus pandemic only really got serious less than three months ago. Towards the beginning of March, even through to mid-March, in Australia, we were still getting together in large groups to celebrate birthdays, enjoy an end of the week drink down the pub, and play team sports within our community. Then everything started to change. I still find it amazing when I think about how quickly we’ve all be able to respond, to react, and to adapt.
Supermarket check-out employees now scan my groceries and serve me behind large, clear plastic screens. My temperature is taken before I enter through the doors of my local pharmacy. People drop back to single-file when I pass them on the street. This is currently the new norm, and this is what I’m now used to. When someone doesn’t behave in this way, then I deem them to be acting irresponsibly; by not moving to the side, by not sanitising their hands at the free sanitising station when walking into a store, by still engaging in group activities both indoors and out, I find myself feeling miffed, to say the least.
In Australia, we have just started a three-staged approach to relaxing our COVID-19 restrictions. If all goes to plan, then by mid-July 2020 we will be able to once again enjoy outdoor public gatherings of 100 people. All Australians will be able to have returned to work based on ensuring they continue to abide with adequate social distancing and strict hygiene rules. It’s a roadmap to a COVID-safe Australia.
While it will undoubtedly be at least 12 to 18 months before we have a vaccine, and even longer until we see international travel return to normal, it’s likely too that our normal routines and the way we interact with people and our community will continue to change, again and again, and again. So it’s about rolling with the tides, going with the flow, and trying to not get too caught up in the ever-changing landscape that is our current society.
No matter where you reside across the world, panic buying has been a consistent flow-on effect from the coronavirus pandemic. In Australia, it was toilet paper that was the big-ticket item. Not bottled water or longlife food as you would naturally think. Toilet paper. People were stockpiling this from the get-go, buying up big and then not only storing in their home for their household use but also selling surplus stock online at heavily inflated prices. I saw a listing online for someone in my community selling ten rolls of toilet paper for $20 – the equivalent of just over £10.
It wasn’t long before supermarkets and stores imposed limits on the number of these highly sought after products, as well as the items that you would expect people to be purchasing in large quantities such as flour, sugar, tinned food, handwash, soap and other general hygiene products. While the price of these products hasn’t necessarily changed, I have noticed that they no longer come on special. Or if they do run a promotion, there are no more half-price sales or buy 1 get one free. Supermarkets know they don’t need to.
I was reading an article from The Guardian recently and came across an interesting graph illustrating figures from the Office of National Statistics (ONS) regarding the price rise of products during the COVID-19 pandemic. On average, UK shoppers are now paying 4.4% more for their shopping baskets than they were before the coronavirus struck. Tinned beans have seen almost a six percent increase since mid-March. Rice is another staple product which has also seen a sharp increase as well as the price of pet food which has rocketed skyhigh. Interestingly, however, the price of pasta sauce has seen a decrease, falling by 4.5%. Thinking about it though, this does make sense; with more people spending more time at home, cooking up a big batch of pasta sauce and letting it simmer away on the stove for a couple of hours is now more achievable than it has been in the past. Now that's a nice thought.
£103.7bn – that’s the latest figure which the UK government’s Office for Budget Responsibility is estimating to be the current price tag on upholding the economy during this coronavirus battle.
It comes after the Office for National Statistics (ONS) released its latest findings collated from over 5,000 surveyed businesses from the period of the 6th to the 20th of April. Results showed that two-thirds of companies have jumped on board with the government furlough scheme – the first time ever in Britain’s history that such a scheme has been offered.
Officially opening on April 20, applications were made by over 185,000 UK businesses for over one million people whose employment has been affected by the COVID-19. A business can use the scheme to pay up to 80% of wages with a maximum amount of £2,500 being paid out per month.
The Federation of Small Business’s Policy and Advocacy Chair, Martin McTague comments, “When the scheme was first introduced there was a sigh and a lot of scepticism thinking that a big government IT system was going to fall over and they were going to be left the victims but actually, credit where it’s due, this has worked remarkably smoothly.”
The ONS survey results show that 80% of UK businesses which have been forced to close during lockdown are making use of the scheme’s support. In addition, 61% of those who are still open are also leveraging it.
“I am placing no limit on the amount of funding available for the scheme. We will pay grants to support as many jobs as necessary,” Chancellor Rishi Sunak said in one of his recent addresses.
Further interesting statistics from the ONS survey include:
The news that the UK Government could soon be 100% backing business loans for the country's small and medium business sector is a welcome headline to read for many. The notion comes after the British Business Bank run Coronavirus Business Interruption Loan Scheme (CBILS) has been on the receiving end of thousands of complaints. A difficult application and eligibility process is deemed by many as impossible for them to overcome.
So it makes me think, how are other countries doing it? What business loan support is available for SMEs around the globe to help them get through this COVID-19 period?
France - The French government has already outlaid €20bn worth of loans to over 170,000 businesses, with another €20bn promised by the end of April. Eligibility of loans is not dependant on a company’s size. On average, the loan size equates to up to 3 months’ worth of the company’s 2019 turnover.
Germany - The german government has made loans of up to €1bn available for businesses to apply for with a minimum 1% interest rate attached. Also available to some is €1bn in emergency funding, which over 18,000 businesses have already applied for.
Australia - The Australian government combined with the Reserve Bank of Australia and the Australian Prudential Regulation Authority have created the Coronavirus SME Guarantee Scheme which supports business’s flow of credit. SMEs with a maximum turnover of $50 million are eligible for these loans. The loans are capped at $250,000 and come with a 6 month repayment holiday.
USA - The creation of the Paycheck Protection Program is available for small businesses that employ less than 500 employees. Monies received through this assistance program can be used to pay staff wages for up to eight weeks. There may be some instances where companies can also use a small proportion of the loan for other means too including rent, utility payments, and mortgage interest repayments. Depending on how many eligibility criteria a business satisfies, some loans may not have to be repaid. Others come with a 1% interest rate. Over 1.6 million businesses have applied and have been approved to date.
Welcome to the beginning of another normal lockdown working week – number four in the UK. In a statement made by the Secretary of State for Foreign Affairs Dominic Raab it appears that the country is buckled in for at least another three weeks; "There is light at the end of the tunnel but we are now at both a delicate and a dangerous stage in this pandemic. If we rush to relax the measures that we have in place we would risk wasting all the sacrifices and all the progress that has been made. That would risk a quick return to another lockdown with all the threat to life that a second peak to the virus would bring and all the economic damage that a second lockdown would carry."
And so this “new normal” is really starting to settle in. We are commuting from our bedrooms, kitchens and living spaces to our home office, which in many cases may just be the kitchen table. The salt and pepper shakers have been removed and the laptop and headphones are now out. You might find that your motivation is now waning; for the first couple of weeks it was all go, creating new routines and settling into them. Now it might just feel a bit, well, uninspiring.
As I go through this experience it’s made me realise just how much energy I actually draw from the world around me. When the world around me is not buzzing with outward energy, it can be much more of a struggle to get energetic and motivated myself. After working from home for over three years now, here are my four tips to help keep you motivated and productive during these crazy COVID-19 times.
Its a tough time right now for SMEs as the whole world scrambles to get their head around the coronavirus pandemic that is affecting us all in many different ways.
While governments are supporting their national businesses and economies by providing relief packages and other financial breaks, making sense of it all can be easier said than done. The support might be there, but do businesses know about it, and can they access it?
The British Chamber of Commerce’s Corona Business Impact Tracker aims to directly answer these questions. It provides an overview of the current UK SME climate when it comes to the impact that COVID-19 is having, as well as looking at their ability to benefit from the various grants and funding which the government is making available to them.
Here are the stats from the most recent survey; a sample size of 1,000 responses taken from the beginning of April:
“It’s vital that governments across the UK continue to work closely with business over the coming days. Every minute counts, and governments, local authorities and banks must do everything in their power to ensure support gets to firms on the front line more quickly” comments Dr Adam Marshall, Director General of the British Chamber of Commerce.
It’s the UK governments SME support response to COVID-19 – a £22 billion benefits package that sees cash grants being dished out and a business rates holiday coming into effect from 1st April 2020
For many businesses right now, cash flow is in a delicate and very tenuous position. With social distancing rules set out by the government to help flatten the coronavirus curve, social gatherings and spending on the high streets has wound back to zero. For many SMEs across the board, cash flow has completely stalled. Allowing businesses to go into “hibernation” mode is the name of the game right now, and the benefits package as released by the UK government will hopefully be the lifeline that helps to keep many of them afloat.
“High street businesses are at the core of what keeps our economy thriving” comments Chancellor of the Exchequer Rishi Sunak. “That is why we are taking the unprecedented step to provide businesses with the vital cash they need to ensure their survival during this difficult time, with 300 businesses having already received money in their accounts.”
£25,000 cash grants have already been paid out to many high street businesses. Those operating within some of the hardest-hit industries such as the hospitality, retail, leisure sectors and nurseries, will benefit from an exemption on their business rates for the next 12 months. For those running eligible small or micro-businesses in these sectors, they can expect grants of £10,000 or £25,000 to help them keep ticking over. Businesses who have already made their rates payments but who can benefit from the rates holiday will be refunded in due time, and will be contacted directly by their local government.
Councillor Rachael Robathan, leader of Westminster City Council, says “The first 300 grants worth more than £3 million have now gone to some of the borough’s small businesses and we are working as fast as we can to process others. Help companies now is vital to help them survive and be ready for normal trading when the epidemic eases.”
It certainly can be hard to turn off, or even down, the noises coming from the world right now. We are constantly surrounded by news and updates relating to coronavirus. TV, radio, social media feeds, talking to friends and family, it’s all around us, and it’s themes that are heavy and demanding, mentally, emotionally, and financially.
Below is some guidance to help you stay mindful of your mental health and keep things in check
For more information, refer to the World Heath Organisation’s PDF – Mental Health and Psychosocial Considerations During COVID-19 Outbreak: HERE
Talking to many experienced home workers, they often say the same thing; they find themselves to be more productive when working from home. So if you’re new to the working from home or remote work scenario, below are four key tips to help you make the most of this new opportunity and make it work for you.
When it comes to the coronavirus, it really is a day-by-day situation. Running or operating a small business in these times can be a decidedly more tricky and stressful undertaking. Things are changing ever so rapidly and it’s hard to keep up with it all, knowing where to turn to and what measures we should be taking.
Chancellor of the Exchequer Rishi Sunak recently stated that he’ll do “whatever it takes” to help keep the UK economy afloat. “I know how worried people are. What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure.”
For those small business owners and managers, the importance of having up-to-date and reliable information at hand is paramount. Below is a list of useful links providing guidance and advice on dealing with this pandemic. These sites are updated on a daily basis and so are a good port of call.
Regionally as well, your local government websites as also a good source of reputable information.
We all know an organisation is only as good as the people that it employs. Staffing and recruitment is a massive industry. In the year to March 2019 the recruitment industry’s turnover sat at £38.9 billion. This figure takes into account temporary, contract, and permanent placements (as published by a Recruitment and Employment Confederation report).
“The industry’s progress is good news for the whole economy because good recruitment underpins growth and productivity for clients and opportunity for candidates,” comments Chief Executive of the Recruitment and Employment Confederation, Neil Carberry.
While many of these hires would’ve been managed through a recruitment company, engaging in a third-party company to help facilitate the recruitment of staff is not always a viable option for small to medium-sized businesses. Here are three tips for helping to get the best out of your interviewee:
IR35 – it’s the new UK government legislation which allows HMRC to tap into the world of contractors which are really functioning for a business more like an employee than anything else. It’s been set in play to fight tax avoidance whereby a contractor might be providing services through say a limited company, but if that go-between was not being used, really they would be employed directly by the company they are providing the services to.
The IR35 legislation changes will come into effect April this year, and the research shows it’s the construction industry which is top of the list for the most perturbed. Understandably too, when you think about the number of different contracting roles which pertain to this industry; business owners and operators have a lot to make sure their head is wrapped around before this date.
Some research was conducted by the public and private UK digital solutions provider Bedigital regarding the legislative rollout. It found that, overall, 45% of business owners surveyed find themselves confused about what IR35 means for them and how things need to change ahead of April. Diving deeper into those who are perplexed, 56% of businesses within the construction are unsure, followed by 48% of the hair and beauty industry, 43% of the food services sector, 41% of travel, and 38% of the marketing industry.
Richard Tyler, a representative for the company, commented that, “The results of this research clearly highlight the need for businesses to gain a much broader understanding of what the upcoming IR35 means, and how it will affect their company finances. Whilst the new off-payroll rules present a level of risk to businesses in the short-term, acquiring services using outcome-based SoW’s is a sensible way of reducing risk. However, if businesses do not adequately prepare for the changes, it may quickly create unexpected costs and issues”.
The Federation of Small Business’ latest Small Business Index (SBI) has just been published for the last quarter of 2019 and it paints a portrait of a not-so optimistic current situation for those operating in the UK small business world.
A summary of the key findings include:
With business confidence therefore at an eight-year all-time low, surely things should only go up from here, right? Nina Skero, Director and Head of Macroeconomics for Cebr (Centre for Economics and Business Research) comments that “Cebr expects 2020 to be a year of decent economic growth in the UK. The expansion will be supported by a variety of factors including a recovery in consumer confidence, return to stronger business investment growth, government spending pledges and accommodative monetary policy. The UK’s political and economic environments are quite different now compared to much of the period that this SBI recovers. With this in mind, it will be interesting to contrast these findings with those that will be published in Q1 2020.”
Green, green, green; becoming more environmentally friendly and sustainable is something that we all can aspire too, whether it’s at home or at our place of work. We know of all the usual things; recycling our waste, recycling our paper, installing more energy-efficient lighting, shutting down and turning off electrical equipment at night… the list goes on.
But what are some other ways that we can make a difference? How can we think outside the box to reduce, reuse and recycle even more? Here are some other ways that you can promote a greener culture within your business or place of work.
In today’s age, it seems like starting a business is in a way, easier than ever. Whether it’s starting your own sole trader venture and entering into the world of the gig economy, or you’ve got the beginnings of what you think is a great business idea, start-ups and dabbling in the world of entrepreneurship is more accessible than ever.
It’s one thing to dream the dream, but then you have to make it happen. Once you get up and running and off the ground, getting through those first few years can be hard going; as everyone knows, the survival rate for new businesses within those formative years can be pretty rough.
Some interesting research was recently conducted by the B2B company BusinessComparison, looking at UK start-up survival rates during a new business’ first five years of operation. Drawing on figures from the Office of National Statistics (ONS), their research found that only 25% of UK businesses survive their first five years.
Furthermore, they also drilled down into which UK towns and cities had the highest rates of survival; and then at the other end of the spectrum, the lowest. To get the stats, they looked at the period of 2013 to 2018 and asked the question, how many new businesses that started at the beginning of this period were still in operation at the end. Here are the results.
Top five highest five-year survival rate:
Lowest five, five-year survival rate:
Industry wise, sitting at the top were petrol and fuel refinery businesses (100% - 5 out of 5), followed then by membership organisations (59.76%), beverage companies (53.23%), residential care companies (52.25%), and those businesses within the creative/arts/entertainment sector (52.00%).
It’s kind of a mouth full, Strong Customer Authentication Rules, or SCA for short. But if your business handles online payments, then it’s something that as an owner or manager you’ll need to be across.
The SCA’s are a new set of rules and regulations which define how consumer's identities are substantiated when they are making online purchases. It’s all in the name of reducing the risk of online fraud – an extra step will come into play when buyers are making online purchases; a code could be sent to the purchaser via a text message or app push notification which they need to input to complete the transaction, or a call is made to their landline phone, for example.
If your business has an online e-commerce component, ie. if your customers can make purchases through your website or mobile app, then these new set of rules is something that you need to take note of.
There are two important dates to remember dependant on where you conduct business; for EU card payments, you’ll need to be on board by 31 December 2020. For the UK, the date to remember is 14 March 2021. If your business utilises a payment gateway or payment provider after these dates which does not support the new SCA rules, then your consumer’s transaction will be declined.
And although those deadlines may seem far, far away in the distance, testing and trials may need to happen before the payment process is running smoothly.
Your business's payment gateway provider or acquirer should be your first port of call. Check with them to confirm that they’ll be supporting the technology known as 3DSecure. If your business takes card payments, and your payment provider does not support this technology, then come the 14 March 2021 (or 31 December 2020 if you do business in the EU), your customer's transactions will be able to be completed.
For more information visit HERE
Or, to download the UK Finance’s detailed report in full, visit: HERE
Everyone has a duty of care in their work, a set of morals and ethics that should always be adhered to, sustained, and maintained. For six bankers and advisers at the Lloyds Reading branch between 2003 and 2007, this was something that they failed to uphold.
Corrupt bankers, which included two former HBOS executives, were key players in the scandal that saw an array of UK small businesses crumbling after being inundated with debt. Those in the position of power, who then used these profits to live the high life, stood trial back in 2017 and were sentenced to a total of nearly 50 years in jail.
It’s been a long road to compensation, as those affected by the scandal have been battling their way through the tunnel for over ten years to get to the light at the end.
A recent review conducted by retired judge Sir Ross Cranston calls out Lloyds, who took HBOS under its wing in 2008, for some serious deficiencies, not only in the evaluation process of their compensation but also for their transparency throughout the process.
Dishing out £102 million as they have previously done, is now just the tip of the iceberg, with Lloyds saying another one-off payment of £35,000 would be payable to the victims as of December 2019. Current claims are that the total figure could climb to circa £500 million. While monetary compensation is an obvious step in the right direction, along of course with those who acted wrongly being held responsible for their felonies, situations like can only create feelings of distrust and uncertainty when it comes to small businesses and the banking world.
A spokesperson for Lloyds had this to say: 'The group is committed to ensuring Sir Ross Cranston's recommendations are implemented and that customers affected by the HBOS Reading fraud are offered the option of an independent re-review of their cases, looking again at the assessment of any direct and consequential losses that flowed from the fraud.'
We live in a digital age. So much of our lives these days is online – both personal and business. As an individual many of us keep our private lives to ourselves (there’s a reason why they’re referred to as our private lives right?), but as a business, more often than not it pays to be seen. Businesses should be easily accessible across all platforms that could act as potential touchpoints for a customer base, be it websites or social media. In addition, we too as people and or employees are all easily accessible. We are open to being able to be contacted by anyone and everyone who has our email addresses, who has our digital contact information.
A recent analysis conducted by cyber-security awareness platform CybSafe paints a vivid picture as to the rise of cyber-security breaches and cyber-crime in today’s current day; and it is just that, on the rise, with the highest number of cyber-security breaches being reported to the ICO in 2019 than ever before. Cybsafe analysed 2017 – 2019 data from the Information Commissioner’s Office (ICO) and sitting at the top as the number one culprit was phishing data breaches, whereby secure information is gathered through the use of deceptive emails or disingenuous websites. In 2017 there were only 16 phishing breaches reported, that number jumped to 877 reports in 2018. In 2019 the number was up to 1,080, which represents 45% of all the reported cyber-security breaches known to the ICO for that year.
Oz Alashe, who is CEO of CybSafe, comments that “With GDPR causing a massive surge in reporting during 2018, we might have expected that reports to the ICO would taper off in 2019 – but this wasn’t the case. 2019 surpassed the numbers achieved in the previous year quite dramatically. In terms of human error data breaches, it was a particularly significant year.”
No one wants to start the new year, or the new decade, at an all-time low. However, when you’re at the bottom, they say the only way you can go is up, and so let’s hope that’s exactly where confidence goes for those circulating in the small business world.
The Federation of Small Businesses Q4 2019 Small Business Index (SBI) results may not paint the brightest picture, but now that the latest general election has been and gone, there’s hope that things will settle over the next quarter and confidence can be regained.
To produce the SBI, 1,029 small businesses were surveyed during the end of November and beginning of December 2019. A summary of the key results include:
Craig Beaumont, the FSB Director of External Affairs and Advocacy comments that “The small business community has been stifled by uncertainty for more than three years. This quarter, the added uncertainty that accompanies a general election made it even harder for small firms to plan, hire and increase profits.”
Every year it can feel like time is getting away from you; the days roll into weeks, the weeks into months, the months into years, and now, the years into decades. Owning and/or operating a small business can only just add to this time warp, as you’re constantly looking ahead, making plans, forecasting and thinking about what is next.
At this time of year, one can’t help to reflect; although it may not be in a year-end, financial sense, but more in a year-end overall contemplative and introspective way. So, if you find yourself thinking like this, here are three key New Year business resolutions to take you and your small business into the next decade:
Hefty business rates can be a big battle for small businesses and it’s been a key contributing factor for the fading high streets across the UK which has been widely reported on recently. Enter the Boris Johnson-led Conservative government’s plan to slash business rates, providing those small operators on the UK’s high street with a direct shot of some much need oxygen.
"We want to reinvigorate communities up and down our great country, helping people put the heart back into the places they call home. That's why we're taking action to save our high streets and keep pubs, cafes, and hairdressers open by slashing their business rate bills by half" Sajid Javid, Chancellor of the Exchequer said.
The cut in business rates that sees the standard retailer discounts increasing to 50% from the already offered 33% will come into effect from April 2021. Any independent high street retailer with a rateable value below £51,000 will be eligible for the relief which could save them up to £12,500 all up. Those businesses which also fall into the entertainment category, such as music venues and cinemas, also qualify.
While this discount provides a much-needed boost to those small businesses which may be struggling, Josh Hardie, Deputy Director-General of the Confederation of British Industry (CBI) has been active in vocalising how the UK business rates system is "fundamentally broken", as he continues to promote a "radical reform" of its overall structure. However a full business rates review could take up to five years; then to implement the changes, well, even longer.
Mike Cherry from the FSB also backs this up, “It’s vital that this Queen’s Speech is now followed-up with a business-friendly Budget in the new year, one that encompasses the fundamental review of the regressive rates system promised today.”
A bright light shined down on this year’s Black Friday and Cyber Monday events, both online and off. Analysts were predicting it, and so it’s a good news story that the sales from the day didn’t disappoint those small, medium and large retail business operators. Consumers were expected to spend around the £4.3bn mark, which would’ve been a tidy 2% up on the figures from 2018’s Black Friday. Barclaycard reports from Black Friday show that there was a 16.5% increase on the 2018 figures for the value of transactions, as well as a 7.2% increase in the volume of transactions. Figures from Cyber Monday were also positive, with a 6.9% increase in transaction volume comparative to last year.
Interesting was that according to retail data company Springboard, who record shopper numbers at 450 UK retail outlets, the busiest time of the day for sales was 5 pm.
The British Retail Consortium Chief Executive Helen Dickinson commented that “Electronics and clothes both benefited from big discounts, with the recent cold snap adding further urgency to purchases of winter-wear. Furthermore, as the spectre of a no-deal Brexit has been pushed back to after Christmas, consumers were more prepared to open their wallets to a little extra festive spending.” Long may it continue.
But how does Black Friday specifically impact the UK SME world? Nicole Rohde, who is the PR Manager for the handbags and leather goods boutique company Maxwell-Scott said “Black Friday 2019 has been incredibly successful for us as we managed to hit our monthly revenue target in just one day! For our UK website, we are 300% ahead in revenue compared to last year’s event. I believe that SMEs have an advantage compared to big retailers as they usually have a much closer relationship with their customer base. That means Black Friday offers can be tailored way more towards the actual needs and wants of the customers.”
December 12th 2019 marks the opening of the first round of funding applications for the new Innovate UK Management Knowledge Transfer Partnership (KTP) programme. Dedicated to helping UK SMEs to grow and develop through effective business management, the programme equips small businesses and those people within them with the tools, the knowledge and the information to help them to drive their business to success.
The Management KTP programme sees applicants partnered up with a cohort of academic experts as well as a skilled graduate. Working together, quantifiable and tangible management practices and strategies are defined which focus on improving the all-round effectiveness and capability of the business.
Phil Goddard, CEO of CSols Ltd, a laboratory informatics software and services company based in Runcorn, who has previously taken part in the programme comments: “ The Knowledge Transfer Partnerships were not really on my radar but when I found out more about them I realized it was the precise mechanism we needed to realise our innovation goals. It has transformed our business, taking us into new markets and brining in fresh thinking and capability which has made us much better able to develop the kind of ideas which will expand our business for years to come.”
The business functions and activities which the management KTP programme covers specifically include:
Funding applications for Management KTP close at midday on 19 February 2020. The programme offers the opportunity for interested applicants to connect with one of their Knowledge Transfer Advisers who will first work to determine whether your management project is suitable for the Management KTP programme funding. Successful small business applicants commit to covering 33% of the cost, large businesses 50%, and then Innovate UK will pick up the remainder.
For more information visit HERE
When things aren’t working, something has to change. That’s the plan of attack for Npower with reports that in the first nine months of this financial year their profits have fallen 27%. This equates to a €167m (£142.4m) loss, which is more than double its loss year-on-year. So now, the UK electricity generator and supplier of gas and power, which is owned by German-based company E.On, is set to cut 4,500 jobs in a move that aims to help them turn that figure back around.
E.On’s Chief Executive Johannes Teyssen comments, “the UK market is currently particularly challenging. We've emphasised repeatedly that we'll take all necessary action to return our business there to consistent profitability.”
That necessary action sees them look to close three call centres at Hull, Worcester, and Houghton-le-Spring. There are also plans for them to merge Npower computer systems with those used by E.On to save money. With the current reorganisation plan, small business and domestic customers would leverage the same customer service teams and computer systems while industrial clients continue on as normal.
Npower also has offices at Birmingham, Leeds, Oldbury, Solihull, and Swindon, and E.On says that they won’t know the final number of jobs which will be cut until they have finished all of their consultations with unions.
E.On representatives say that the government imposed electricity rate price cap which was introduced in January this year is a major contributing factor to the downturn in their profits. In addition to this, an impulsive electricity and utilities UK market which has seen many small-scale providers pop up as quickly as they disappear over the past few years, has many of these short-lived competitors offering unsustainable discounted and cheap deals which the large scale providers can’t meet, is also being called out for the decline.
In 2018 Small Business Saturday injected £812 million into the UK’s small business economy. From cafes to butchers, greengrocers and cinemas, retailers around the country benefited from the initiative which was first conceived in the US by American Express back in 2010. Now in its seventh year in the UK and growing every year (that £812 million figure is up 8% on the previous year), this year’s date of 7th December 2019 will hopefully see that figure grow even more. Statistics from 2018’s Small Business Saturday in regards to the most-visited retailers include:
If you’re a business owner or manager of a small business and wondering how you can get involved, there are several ways that you can leverage the event:
For more information on the Small Business Saturday, visit HERE
Small business owners know all too well about the struggles of running your own business. So much responsibility, so many decisions, so many variables and so much that you just generally need to know and have your head around in order to succeed.
The gauntlet is constantly being run with challenges that are thrown at you from every which way, but let’s not forget about the benefits of being a small business. Let’s look on the brighter side of things and consider the glass half full because small businesses really are the lifeblood of our economy. In the UK in 2018 there was a reported 5.7 million SMEs operating. This number accounts for over 99% of all businesses. Drilling deeper down, 96%, or 5.4 million, of these, were operating as micro-businesses (with 0-9 employees).
So regardless of if you’re thinking of starting an SME or you’re already running one, let’s take a moment to remember some of the advantages of being a small business:
Open banking; have you heard of it? Many of us have probably used this form of quick payment in the past when purchasing something as an individual consumer. You’re online, and instead of being sent a conventional invoice with all the details for how to make your payment, you’re sent a link for payment. Click on this and you’re directed straight through to a payment page with all the details of the business and the amount needing to be paid already included. All you then have to do is click the button to confirm your payment; the amount is then automatically sent from your bank to the business’ account. No need to log in to your bank’s app or their internet banking page to manually enter the payee information – this open banking payment process makes things a whole lot quicker and easier.
So thinking of how simple this makes it for the average day-to-day consumer, could this be just the ticket for helping get on top of the late payment problem which is an on-going bugbear for UK SMEs? The latest statistics as taken from the Independent Chartered Accountants of England and Wales (ICAEW) Business Confidence Monitor show that nearly a quarter (24%) of SMEs are reporting that late payments are more problematic than they were a year ago; alas, things are not getting any easier.
Finance Director of construction industry business Panton McLeod Limited, Tim Gardiner, comments that “A large part of the problem is where companies have complicated processes for the submission of invoices or claims for payment.”
Surely with open banking working fluently and smoothly within the consumer world, it could also be leveraged to work as such within the B2B world, helping to simplify what can otherwise be complicated payment processes. Furthermore, payment security is increased through the use of open banking, as the payer's account details and information is only ever sent between themselves and their bank. Seems like it could be a win-win all around.
As the weather cools down and the days get longer and darker, the overall energy in a workplace can take a nosedive too. But there are some simple things which can be done to lift your employee's mood, helping to keep them motivated, engaged, and all the while promoting positive mental health.
Amid news reports of some not so positive news in the banking and financial services sector (queue the Royal Bank of Scotland’s reported third-quarter £900 million loss due to the ill-advised selling of payment protection insurance), it’s nice to read how Starling Bank is striding ahead, raising a tidy £30m for their latest expansion plans.
If you haven’t heard about the UK-based challenger bank Starling Bank, then don’t worry, you’re most probably not alone, as they only entered the financial services space in 2014. In March 2018 Starling first launched their business accounts, in late 2018 they announced a partnership with Post Offices which allowed for cash deposits to be made, and in February 2019 they introduced their Euro account to the market.
Despite just starting out, they’ve reaped a number of awards for their various products, including Best Business Banking Provider 2019 for their business account, and Best British Bank and Best Current Account 2019 for their personal account. Offering a “mobile-only” product, they operate entirely digitally, with banking done via their app and online. Understandably therefore, development is key. This latest round of funding will be invested into SME bank accounts, B2B bank services as well as the financial retail space. As they are reportedly expecting to reach a major milestone of their one-millionth customer within the next month or so, they’ll also be looking to increase their presence in Europe.
Chief Executive and Founder of Starling Bank Anne Boden comments that “We’ve come a long way since Merian Global Investors’ first investment of £50m earlier this year, adding new products and features and accelerating our rate of customer acquisition. This latest investment of £20m from Merian Chrysalis will support Starling’s rapid growth and help us reach one million customers and £1bn on deposit within weeks. It will also help us accelerate our global expansion, starting in Europe so that even more people can benefit from the Starling app.”
We’ve all experienced it before – cell phone reception dropouts, painfully slow internet browsing, downloads that seem to take an eternity. It’s one thing for us as an individual to battle with these connectivity issues, but when you’re running a small business, it can create an even bigger problem. New customers and clients can’t contact you, existing ones feel disconnected, and overall it’s just a frustrating experience for employees and owners within the business.
New research recently released from the Federation of Small Businesses (FSB) shows some real black spots when it comes to their current phone and internet connections. UK small businesses are clearly feeling it now more than ever.
Here is a summary of the numbers from the research:
“Unfortunately, an unreliable internet connection and poor phone signal are familiar challenges for small businesses across the UK. Improving digital connectivity is an urgent priority to ensure our 5.8 million-strong small business community remains the engine of the UK economy,” FSB National Chairman Mike Cherry commented.
The late payment epidemic that is plaguing UK small businesses has had the media spotlight shone on it time and time again in recent times. And so it should, with Business Leader reporting at the beginning of September that 31% of UK SMEs have experienced problems with late payments. Put a price tag on this and it sits at approximately £10,000 per business. Add that all up over the last 12 months for the overall long-term effect on the UK economy of £51.5bn. Ouch.
Enter the Business Basics Programme – a fund that is currently in its third round and is being managed by the Department for Business, Energy & Industrial Strategy. Established as a funding programme, the initiative has been set up as a way of developing new and innovative ways for SMEs to leverage technologies and management practices which will help them to improve their productivity and profitability. In fact, half of the funding has been geared towards looking at the late payment problem, with calls for technology and systems that are both accessible and affordable for SMEs and that would fit seamlessly into their daily operations helping to simply invoice processes as well as their payment and credit management processes.
Minister for Small Business Kelly Tolhurst comments that, “As a former small business owner, I know how important it is to harness technology to make your business more productive. This is why we’re awarding another £2m from our Business Basics Fund and backing 12 more exciting new projects to develop their innovative ideas.
I am particularly pleased that we are making up to £1m available to target the issue of late payments, which I know can have a real negative impact on SMEs and their cash flow. I look forward to seeing the innovative ideas that this fund competition produces.”
For more information on the Business Basics Fund, visit HERE
It can be hard for any business to find the right people with the right skills for the job at hand. Not to mention the fact that recruitment processes are an expensive one. Getting this right is crucial to SMEs, with less money, infrastructure, or other staff around to pick up the slack. If an SME doesn’t have the right people with the right skill sets, then the effects can be hindering or stagnating at the best of times, and potentially damaging at the worst.
UK recruitment giant Robert Half has just released their findings from an independent study which they conducted into the so-called skills gap that exists in the UK market. By “skills gap” they’re referring to the void between the skills that a business’s employees have and those skills that the business needs. This can be anything from hard skills such as data analysis, scientific knowledge or trade skills, to softer skills such as resilience, problem-solving or leadership. It is estimated that the skills shortage will, on average, cost UK SMEs £145,000 in the next year, rising to £318,000 in the next five years.
Ranking the highest in terms of negative impacting events to their businesses skills gap (ie. those factors which are at play to widen the gap), 59% of those businesses surveyed said they are most worried about a recession, 47% said Brexit, equal third was the General Election pre-2020 and IR35 at 15%, and Digitalisation ranked fifth with 12%. Flipped the other way, and it’s Digitalisation which 44% of SMEs saw as potentially having a positive impact on their business, the General Election pre-2020 ranked second with 26%, Brexit came in third with 20%, IR35 sat at 18% and a recession was fifth with 16%.
Managing director of Robert Half UK, Matt Weston, comments that “The nation is gripped by the current skills shortage. For SMEs, the priority for the next year should be identifying and filling gaps within their organisation. Training and development initiatives, with a focus on upskilling existing staff, are the obvious starting point. At a time when change is the only constant, adaptability and resilience will be the key soft skills to develop.”
It’s been a while since I’ve written a blog post on the big “B” word, and with some startling recent survey results, I feel like it’s about time again.
The no-deal Brexit date of 31 October is now clearly visible ahead, and many small businesses are concerned that a no-deal Brexit will hurt their business; over a third of the 1,062 firms which were surveyed by the Federation of Small Businesses (FSB) in August this year in fact. While there is planning which can be done by some businesses, 63% of businesses believe that they are unable to prepare for Britain’s no-deal exit from the European Union, with only 21% confirming that they are prepared for such a situation.
For many small businesses, it’s the financial burdens which are hindering their ability to prepare. Survey results show that the current average price tag for no-deal Brexit preparations is £2,000 at a minimum, rising to £3,000 for those that deal in the export/import industry; and less than one third have built up their stock levels. Furthermore, almost half believe that a no-deal situation will be damaging to their business’ bottom-line and thus they would value any government financial support that was on offer.
National chairman Mike Cherry of the FSB comments that Government support in the terms of raising awareness of the impacts of a no-deal Brexit, the Government “must also turn to meaningful financial support. This is desperately needed and would certainly provide a much needed shot in the arm for those firms that have already spent money preparing. For those firms that can’t prepare, we need broader support including cutting VAT and National Insurance, uprating the £3,000 employment allowance and extending the two-year ‘retailers’ business rates discount of 33 per cent, to a wider range of smaller businesses.”
Travel is such an eye-opening experience as to the way other cultures live and how other countries operate. Whether it’s a few days or a few weeks, being immersed in a new way of life, even if only for a small time, allows for an eye-opening experience as to the goings-on and ins-and-out of a place.
Having recently returned from a week in Vanuatu, I thought I would share in some of my experiences while on this remote group of islands (of which there are 130 or so in fact). First up, if you’re wondering exactly where Vanuatu is, you’re not alone. Majority of people when I said I was jet setting off to this place immediately responded with, “where is that exactly?” Nestled in among the group of south pacific islands east of Australia, it sits alongside New Caledonia, Fiji, Tonga, and the Solomon Islands. Its economy is based largely on tourism, agriculture, and fishing, with key exports including coconut oil, cocoa, coffee, beef, and timber.
Joining the Commonwealth in 1980, the island-country continually encounters all the difficult factors you would expect an isolated island to have to face. In 2015 it was rocked by tropical cyclone Pam which is still at the forefront of people’s minds and is talked about as being one of the most devastating natural disasters in Vanuatu’s history. The nation is still working to bounce back, slowly but surely; and the term “island time” is something I can say I experienced. Taxi transfers booked for 11 am show up at 12:30 pm, tours we enquired about we never heard back from, and small shops we found in local villages just never seemed to be opened. We wanted to spend more money while we were there, but alas, it seemed that people were doing other things.
A largely self-sufficient way of life, people are out catching fish, tending to their vegetable gardens or generally just enjoying the slower pace of life. It seems not operating at 100-miles per hour reflects well on the Ni-Vanuatu people, who were some of the friendliest and warmest people I have ever encountered on my travels. Returning home and reflecting on my experiences, I am reminded to slow down and stop every once and a while to enjoy the more simple things in life.
September 1 saw the UK government throw down new measures to help try to stifle the late payment problem that plagues the world of UK SMEs. The change dictates that big businesses that have a history of poor payment practices will no longer be able to bid for high-value public contracts that are worth more than £5m a year.
The idea of this restriction was first floated back in November 2018 with the Prompt Payment Code. This calls for any business who puts a tender in for government contracts ensuring that 95% of all their supply chain invoices are paid with 60 days.
The move by the UK government is being regarded by many as a big step in the right direction. Tim Boag, Aldermore’s Group Managing Director for Business Finance, has said that “This Government initiative will increase accountability and support the small business community in an uncertain economic climate.”
In addition, ever vocal campaigners for crushing the late payment problem, the Federation of Small Businesses (FSB), National Chairman Mike Cherry comments, “We welcome the new administration taking ownership of the late payment crisis with this crucial step, sending a message that late payments will not be tolerated within Government contracts.”
And one would say, it’s about time. Overall for the UK economy, the price tag on the late payment fiasco is a staggering £51.5bn; and this is just what’s been recorded.
Hitachi Capital UK, one of the major suppliers of financial solutions for both businesses and consumers across the UK, recently conducted a nationwide survey in order to put a value on how much late payments are costing UK businesses. The company surveyed around 1,000 businesses during the month of July 2019. Respondents were a mix of owners, key decisions makers and freelancers which run their business in the UK. Those surveyed were asked to estimate a total financial cost figure which they could attribute to a direct flow-on effect from their experience with late payments over the last 12 months. From here, Hitachi Capital UK used the average cost value per business threshold and multiplied it by the percentage of respondents per threshold from the total number of UK SMEs (taken from the most recent Department for Business, Energy & Industrial Strategy data). This equates to 5,600,000 UK SMEs which, as a combined total, is dealing with at least a £51.5bn late payment price tag.
Here are the stats:
CEO of Hitachi Capital UK, Robert Gordon, comments that “An imbalance of power between clients and suppliers, often driven by larger players abusing their position, has led to a widespread late payment culture that is damaging UK SMEs. As our research has shown, if we let this go unchecked, huge numbers of businesses will continue to experience cash flow pressures at a time of wider economic uncertainty.”
Employee well-being, it’s been a hot topic of 2019. With more and more emphasis being put on mental health, both within the work environment and outside, it makes sense that organisations look at the different ways in which they can be supporting their staff and positively influencing their overall total at-work wellbeing.
Xero is a big company that is taking well-being seriously. They introduced wellbeing leave for all its employees towards the end of last year where Xero staff members are given a number of days off that they can use as mental health days. While Xero staff are still all entitled to their statutory annual leave days, the old term “sick leave” has been thrown out the window and instead “wellbeing leave” directly replaces this.
Xero’s Chief Customer and People Officer, Rachael Powell, comments that “it’s long been assumed that being sick is physical, but our version is that it could be physical, or mental, or spiritual or emotional. Whether it’s just been a full-on week, or if our staff are struggling with anxiety or depression and can’t face the day, we want to empower them to take the time to recharge and recover.”
So what does wellbeing leave look like? Well for some this might mean a cosy day spent inside on the couch recharging, while for others, it might be a relaxing day spent hiking or walking for others; it’s completely up to the individual.
While, as a small business owner, you might not be able to make the switch completely from the standard sick leave model to the wellbeing leave model as Xero has done, it could be beneficial to think about ways in which some of this way of thinking could be adopted.
As Powell goes on to say, “we don’t want people to feel like they have to come to work when they aren’t in the right state to be here.” Really, this is 100% the case for any business big or small. An employee’s productivity is about the frame of mind and engagement, and if either one of these is faltering, perhaps it’s more beneficial for both the business and the individual to take a moment to rest, recharge and reflect to get it back on track.
We’ve all experienced it before; we go to make an online purchase and before being able to complete the transaction we are sent a text message with a code that must be entered before the check-out process can be completed. Although this process may be slightly annoying for some, for others it can throw a bigger spanner in the works. Dependant of the online shopper's location, sometimes cell phone reception can be less than ideal, rendering the whole online purchasing process kaput. The UK's communications regulator Ofcom estimates that at least 3% of UK households don’t receive a phone signal in their home.
And now, under new European fraud rules relating to the Revised Directive on Payment Services, or PSD2 for short, many online consumers may be unable to fulfil their internet purchases if they do not have a mobile phone or have adequate cell phone reception. The new rules which will be rolled out on 14 September 2019, call for banks to be more rigorously verifying online payments. The most common way adopted by the banks will be via a text message which is sent to the purchaser’s mobile phone. Furthermore, if you’re logging into your internet banking to make your payment, the same goes; no longer will a password be sufficient in gaining access to your online account, you’ll also need to be inputting a code which has been sent as a text message through to your cell phone. The work-around for those who can’t get cell phone reception at home is a card reader which generates a pin code whenever a purchase is being made from a new merchant.
It is understood that customers banking with Santander must have a mobile phone registered as codes sent via text or their app are the only option, whereas customers of Nationwide, Barclays and NatWest/Royal Bank of Scotland without a cell phone or reception will be able to receive their pin code via a card reader. As another method, TSB bank is offering automated voice phone calls to landlines.
With business rates continuing to rise, greater pension contributions needing to be made by employers and more robust and complex reporting requirements being handed down by the HMRC, small businesses have got a lot to keep on top of. To put a price tag on all of that, it’s estimated that UK small business costs are up £60,000 comparative to 2011.
These numbers are big and, with the Labour Party broadcasting their intentions to raise the NLW rate to a £10 minimum for all those the age of 16, it does raise the question as to how small business are absorbing all these extra costs.
In May this year, the Federation of Small Businesses (FSB) surveyed 1,162 small businesses’ asking questions relating to the new National Living Wage increase and the effects this has had on their company. A summary of the FSB survey findings include:
Mike Cherry, National Chairman for the FSB comments, “Small businesses continue to be ahead of the curve on pay. More than half were paying all staff the current National Living Wage before they were obliged to do so – an even greater proportion were doing so in the smallest firms. We’re now seeing more small business owners than ever saying that living wage increases are impacting the bottom line. Their first instinct is usually to take the hit personally, paying themselves less rather than cutting staff.”
Lisa is away this week, so unfortunately, no blog :(.
The summer sun might be shining brightly upon the country now but the second quarter of 2019 has been a tough one for many businesses throughout England and Wales. Recently released data from the Insolvency Service details a whopping 4,321 corporate insolvencies were recorded in quarter two of this year. Numbers like this haven’t been seen since the 1st quarter of 2014.
Scotland and Northern Ireland on the other hand, however, had seemingly more sunshine in their corporate worlds. Scotland’s recorded 2019 Q2 insolvencies were 7.1% less than the previous year’s Q2. Northern Ireland was down 29.6% as well - from 125 cases in 2018 to just 88 cases in 2019.
Specific stats from the official data include:
It’s clear from these figures that it is a precarious edge that many UK businesses are balancing on. With a potential no-deal Brexit just around the corner, it seems to be getting all the more difficult for businesses to have certainty about their business operations and to be able to move forward.
On the release of the report, a spokesperson for The Federation of Small Businesses warned that “there's a real danger that a chaotic, sudden no-deal exit on 31 October will cause insolvencies to spiral further, meaning a significant hit to UK economic growth.”
See the entire report, Company Insolvency Statistics: April to June 2019, HERE
It’s was a tough week in the office last week for the Facebook giant and Chief Executive Officer Mark Zuckerberg’s team. After a U.S investigation, a fine of $5 billion has been handed down as the slap on the wrist for the violation of its user’s privacy for years. While $5 billion is indeed a hefty fine, the pockets of the Facebook giant is deep (their portfolio also includes Messenger, Instagram and WhatsApp among many others). They reported approximately $56 billion worth of sales alone in 2018.
At the heart of the privacy encroachments were the social media tech company’s attitude towards protecting its user's data to better leverage from its profitable advertising stream. The Federal Trade Commission (FTC) handed down a settlement demand that calls for stricter regulations on third-party apps that capatalise on Facebook-user collected data. In addition, it calls for more robust regular maintenance checks on unencrypted passwords as well as marking an end to telephone numbers given for security reasons being able to be used for advertising purposes.
Chairman of the FTC Joseph Simons released a recent statement in which he said, “the magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish future violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.”
It’s understood that while Facebook adapts and changes its core operating values to align with this newly handed down accord, they’ll be putting a stronger emphasis on making user interactions and their content less permanent. But what does this look like? Think more content that simply disappears and that isn’t stored. Facebook and Instagram Stories are a strong example of this, where posted content is viewable for 24 hours however, without clicking on a special “feature” button, after that timeframe the content disappears.
With the demise of a countless number of high-street retailers that seemed to plague headlines in the last 6 months, it’s intriguing to hear that it’ the online-retail giant Amazon which is capitalising on these new market opportunities. There have been many high-profile and log established retailers which shut up shop on a number of their bricks and mortar stores recently; Toys ‘R’ Us, Debenhams, Marks and Spencer, Topshop, Dorothy Perkins, Miss Selfridge, Boots…. the list goes on. Falling casualty to ever-increasing operational costs combined with a decline in in-store buying thanks to the power of internet purchasing, it’s rather ironic that it’s the online powerhouse Amazon who is swooping in on the remains.
Yes, last month Amazon opened its first bricks and mortar pop-up store – adeptly named Clicks and Mortar, in Manchester. With many more in the pipeline throughout Scotland, Wales, Yorkshire, the Midlands, and the south-east, (they’re planning on opening ten in total), Amazon is testing the waters over the next year to see just how well they can run.
The concept behind the stores in that they stock products from a range of small business suppliers who are listed on Amazon and whose stock can otherwise not be bought from a physical store. It’s the online world of Amazon bought into the real-life physical world.
This isn’t completely unchartered territory though by Amazon. The move comes after a week-long trial back in October where they opened a pop-up fashion shop in London. The Baker Street store changed out the products they stocked every two days. Not only did it sell products, but it also hosted several events such as yoga, music, beauty trend discussions, and various workshops.
Amazon UK’s country manager Doug Gurr comments by saying, “Amazon is committed to supporting the growth of small businesses, helping them boost the economy and create jobs across the UK. Small businesses are one of our most important customer groups.”
The problem of late payments in the world of UK SMEs has once again been thrust into the spotlight. This time it’s thanks to a whitepaper which has been produced by Paul Uppal, Small Business Commissioner, and Growth Street, the small business capital lending company.
Collecting information and data based on a survey that quizzed UK SMEs on their experiences with late payments, the findings are damning. However, they’re exactly on par with what we’ve been hearing so much about lately; the culture of late payments in the UK is crippling small to medium-sized businesses. What rubs salt into the wound is that so often it’s the big guys who are holding up the procession line.
A summary of findings from the survey show:
Uppal comments that “the key findings in this survey highlight that small businesses tolerate late and non-payment due to a fear of reprisal.”
The timing of this whitepaper couldn’t be better as the Small Business Minister, Kelly Tolhurst, last month released a statement saying, “the majority of businesses pay their bills on time. The amount owed in late payments has halved over the last five years.” This maybe so, but the problem of late payments, and furthermore, the problem that SMEs are afraid to speak up, is cause for concern.
Tolhurst means business though, and she brings to the table potential plans in the near future to hold large companies more accountable for meeting set payment terms. Failure to pay on time could mean fines or censure.
The financial services industry… it’s a tough old world. As news that Deutsche Bank is planning to cut around 20% of their workforce (which is equivalent to about 18,000 jobs) amid a major restructure operation to refresh both their daily operations and their reputation, Barclays in the UK is also under fire. Scorned by UK watchdog the Competition and Markets Authority (CMA), Barclays have come under fire as they’re being called out for misleading small businesses into thinking they needed to open current accounts in order to access other financial services within the bank.
In a breach to legally binding rules and regulations which Barclays signed onto back in 2002, it is believed there are approximately 800 small businesses which have been affected by this banking blunder. A spokesperson for the CMA comments that “the bank’s actions led to unnecessary costs to some SMEs who were made to hold accounts they did not need”.
After reporting a £1.5bn profit in the first quarter, Barclays has been ordered to refund the affected small businesses. While the refunds are small (averaging £2.50 per business), it’s more of the principle of the error which makes you start to think; how else are small businesses being hoodwinked by the big banks?
Perhaps business owners and individuals can rest a little easier knowing that, in this instance, it was the bank that came forward and owned up to their ill-given and enforced advice. Barclays is taking full responsibility, recognising that they must improve their practices from the ground level all the way up to the top.
“We’ve been working closely with the CMA and have corrected a mistake we made which affected a small number of business customers. We’ve taken steps to ensure that this does not happen again,” said a Barclays representative.
The labour force is always evolving, and with the fear of high unemployment rates and the ever-rising costs of living, it’s no wonder the gig economy is ramping up more and more each day.
But exactly what is meant by the term gig economy? The word gig was first coined by jazz artists and musicians back in the 1920s. Fast forward to the present, and in today’s context when talking about employment, the gig economy is all about on-demand jobs that link providers with consumers. From online food ordering platforms such as Deliveroo to Uber’s highly adopted and competitively priced transport services, the gig economy is growing tenfold every year. You can pretty much get whatever you might need when it comes to professional services online now. There is a swagger of websites and apps dedicated to connecting online professionals such as graphic designers and freelancers with those that need their services for a one-off project.
The University of Hertfordshire in conjunction with the Ipsos Mori recently conducted a study looking at just how much the gig economy is booming across nations that, along with Britain, includes Spain, Italy and Sweden. Specifically, it surveyed 2,235 UK residents between the ages of 16 and 75. A summary of the findings includes:
The former member of the Bank of England’s rate-setting monetary policy committee, David Blanchflower, comments that “the gig economy isn’t necessarily bad but it does show the changing nature of work – you also have to look at rising self-employment and short-term contracts in traditional jobs.”
A future belonging within the European Union may not be on the cards for Britain, but that doesn’t mean that relationships UK businesses have with their European neighbours should fall by the wayside too. On the contrary, these relationships should be nurtured and looked after now more than ever.
In mid-June, the UK’s Federation of Small Business (FSB) joined the SMEunited party along with around 70 other member organisations spanning 30 European nations. SMEunited is a non-profit, politically neutral organisation which represents SMEs across Europe. Giving SMEs a voice on the European stage, the organisation keeps an eye on policies, legislation and projects which may affect SMEs. Think of them as a kind of SME watch-dog, as they aim to ensure a favourable climate is maintained so that SMEs can grow and flourish.
SMEunited reports that the 24 million SMEs in Europe count for over 99% of all organisations, along with two-thirds of all employment in Europe. SMEs truly are the lifeblood of the economy of the European continent. SMEunited are a strong campaigner of driving forward positively-impacting projects, creating networking opportunities and connecting SMES stakeholders across industries and sectors.
Martin McTague, FSB’s Policy and Advocacy Chairman comments that, “at a time when our relationship with Europe is undoubtedly changing, joining SMEunited is a sign that no matter what the future partnership with the EU looks like, we’ll continue to be working closely with our neighbours. There are many issues we can work together on such as tackling the problem of persistent late payers, helping to limit the cumulative regulatory burden on small businesses as well as improving the law enforcement response to cybercrime. I’m sure that membership of SMEunited will be hugely beneficial not only to FSB members but all SMEs across the country and the continent.”
For more information on SMEunited including their mission, strategy, policies or projects, click HERE
You might be a new business to market, or maybe you’ve just taken over a struggling venture and looking for ways to turn things around. Either way, once you’re through the risky stages of running a business and you’ve stockpiled together a little bit of capital, consider where that's going to be best funnelled into. Not just for the now, but for the future. I’m talking investments; investments in infrastructure, equipment, staffing, processes, and marketing.
I’ve had to make a conscious effort to not let this blog get over run with Brexit this and Brexit that. Plus I haven’t even touched on the subject of Mrs May’s resignation. Did you notice? Either way, since there have been a couple of weeks of blog posts minus the Brexit buzz-word, I feel it's okay, I can comment on the world of politics again.
So today I want to focus on proposals made by two candidates in the running for the title of the Tory’s leadership position; Secretary of State for Health and Social Care, Matt Hancock, and former Minister of State for Universities, Science, Research and Innovation, Sam Gyimah. These proposals are angled towards the small business market, hoping to whet the appetite of UK SME owners and win them some popularity points.
A summary of the proposed changes from each corner show:
This week, I want to take a moment to look at just how far marketing and the world of websites have come in the last ten to fifteen years. Truth be told, the inspiration for this article has come out of a recent frustration I had when trying to make a purchase online. I had found the perfect product and gone through all the various steps to complete my purchase; imputing personal data, selecting my address from the dropdown box that came up as soon as I started typing, choosing my postage option, and ticking all the permission boxes. All the permission boxes I might add, bar one – the “Acceptance of Terms and Conditions.” The little box just wouldn’t let me tick it. Refreshing the page didn’t help. Going back to the previous page didn’t help; no, that just meant I had to renter all my information again. Zooming in, zooming out. Nothing would work.
Now I was trying to make this purchase on my phone while relaxing in front of the television decompressing after a long day. I could fire up the laptop and see if it was just a problem affecting the mobile version of their site, maybe on a desktop browser, it would be fine? But as I spend the majority of my working day in front of the computer, I simply could not bring myself to turn the computer on during my designated downtime. So I did a Google search and found another online provider, selling the same product at a slightly higher price, whose website did allow me to tick all the little boxes that I needed to complete my purchase.
Ten years ago, businesses may have been able to get away with not having a website, these days it’s 100% imperative - and a fully functional one at that. A small simple error such as an un-tickable box can mean thousands of pounds lost. Now, it’s evolving even further. Come 1 July 2019, the world’s biggest search engine, Google, will be indexing all new websites based on the content that is available on their mobile sites. Websites matter, and these days making them mobile optimised, is mattering even more and more.
14 days – that’s all the time there is to save the giant steelmaker British Steel as the company goes into operation “find a buyer.” Bought and rebranded in 2016 by Greybull Capital from Tata Steel, the insolvency doors have been opened for the company who has been denied the £30m loan needed to keep the furnaces burning.
Approximately 25,000 jobs are up on the chopping block; 4,500 employed directly by British Steel and another 20,000 that the corporation supports. With an operational cost of close to several million pounds per day (for the British Steel Scunthorpe plant), it’s no wonder that there’s a tight cap on the time allowed to find a buyer with a government source saying, “There’s no money to support it – it’s a case of weeks, not months.”
It’s been a short and sharp ride for Gerald Reichmann, who was only appointed CEO of British Steel in April of this year after moving up the ranks of the company from Chief Financial Officer (CFO) and Deputy CEO. On his appointment last month, Reichman was quoted as saying how he was “delighted to have been appointed to this role and look forward to working with our employees, customers and suppliers to grow British Steel.” Albeit it was not to be. Reichman sights a weak market and a weak pound combined with high raw material costs and the on-going uncertainty of Brexit as the key contributing factors in the company’s demise. Furthermore, high energy costs and business rates have also been noted as adding to the blows which make operating in this UK industry a tough gig economy.
An important industry for the UK, jobs within this sector are both well paid and seek out highly skilled workers. With the majority of operations based in the regions of Yorkshire and Wales, average salaries sit around the £36,000 mark; this is on average 50% higher than that of the norm in these areas. These coming two weeks will be important for individuals and small businesses alike in seeing how the steel giant cookie crumbles.
Whether you’ve recently started a new business or you’ve been in operation for a while, knowing that you’re supported is always a welcomed feeling. Queue the Santander Breakthrough Events. As a series of masterclasses, partnerships and workshops, Santander Breakthrough Events aim to connect, inspire and skill-up those in the self-made or small business world throughout the UK.
Amid recent gloomy news reports of Santander UK profits falling by over one third, Nathan Bostock, chief executive, warns that we should expect “a slight deterioration in UK economic growth this year given the on-going Brexit uncertainty and weaker global growth”. Furthermore, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), also comments that the breakdown of Brexit talks and on-going uncertainty, “is damaging the economy, holding back productivity and battering small business confidence.” To read of the Santander UK Breakthrough Events scheduled throughout the country really are a welcomed ray of sunshine.
Across London, Derbyshire, Exeter, Merseyside, Surrey, Avon and more, the Breakthrough Events start this Wednesday 22 May. Attendants should be ready to walk away with practical insights, intel from real-life case studies and scenarios and professional support that will help them to push and propel their small business to prosper no matter what stage it’s at.
A sample of the kind of events being run includes:
Santander is continually adding more events to the mix. If you’re interested in attending any of the masterclasses, workshops or leveraging from the available partnerships, be sure to register in advance. For details or more information on any of the events, click HERE
May 13 signals the beginning of the 2019 Mental Health Awareness week in the UK. Running until the 19th of this month and organised by the Mental Health Foundation, there is no denying how much more in the spotlight mental health is today compared to that of ten or twenty years ago.
It’s news to no one that a person's environment has a major impact on their mental health. From their living situation and work to their relationships and physical health, a person’s financial situation also plays a major role too. Research recently released shows that one in three UK people worry about their personal finances to the point that it has a negative effect on their mental health. In fact, a staggering 46% of people in debt put their hand up to say yes, they also were grappling with a mental health problem.
The UK does have some systems and organisations which exist for support and guidence. The Lending Code, which is adhered to by a large number of banks, finance companies and creditors, makes sure that those companies circulating in the finance world provide reasonable support to those in a tricky personal debt situation, such as fair and just repayment plans as well as extra support if available.
Another such help network is offered by National Debtline, the leading debt advice charity offering free advice and guidance for people to help them deal with their personal debt. They offer a “How to deal with debt” guide which is available for download from their website which advises on steps which can be taken to start again and forge a better personal financial path.
“I would encourage anyone worried about money to seek free, independent help as soon as possible. More than one-third of people wait more than a year before contacting us, during which time their situation can worsen”, Jane Tully, spokesperson for National Debtline says.
Tech London Advocates are the authors behind a new survey, telling the story of how the beast that is Brexit has affected the London tech and IT sector. As a network of more than 6,000 tech leaders, entrepreneurs, investors and experts spanning London, the UK and throughout more than 50 other countries worldwide, Tech London Advocates are in the know when it comes to the London tech scene. This latest research shows that while Brexit has indeed had a major impact on the sector in regards to investment and recruitment, there is still a strong sense of optimism and an attitude of “let’s just get on with it” for the future.
Here are some of the hard numbers:
Tech London Advocates & Global Tech Advocates found, Russ Shaw, comments, “It is no surprise that London tech investment fell in 2018 when so many tech companies are experiencing investors deferring decisions until they see some clarity around Brexit. One thing is certain – the political situation is harming our fastest growing industry and making access to capital and talent harder than ever before.”
However, among all this is hope for the future. The results also show that 82% of respondents believe that when all is said and done, London will still reign supreme as the tech capital of Europe. I suppose only time will tell.
“It is important to all suppliers, not least small businesses that they are paid on time. That is why I have announced that, from this September, we will exclude suppliers from winning contracts if they fail to pay their subcontractors on time. Just this month, I contacted all suppliers to remind them of this intention.” These were the words laid down by Oliver Dowden, Parliamentary Secretary of the Cabinet Office in the House of Commons Chamber discussion on Government Subcontractors and Suppliers: Payment.
The response was to the question asked by Mark Pawsey MP, Conservative for Rugby. Pawsey called for an explanation as to what action the Government was taking to stamp out the poor payment practices which many UK small businesses are often crippled by.
Dowden went on to confirm that the new policy, which will be rolled out in September this year, dictates that suppliers will be unable to win Government contracts unless they have a good track record when it comes to paying their suppliers and invoices on time. Companies tendering for contracts won’t make the cut if they have demonstrated an inability to pay their suppliers on time for two consecutive quarters.
Dowden further confirmed that currently ten out of 16 government departments are meeting the prompt payment targets that are in place to ensure:
Things then got a little tenser when Jon Trickett, Labour MP for Hemsworth, made mention of the Minister’s own department, the Cabinet Office, which he claimed in the last two years had seen a threefold increase in late payments. Dowden dismissed the claim, saying that the latest figures from March show that 88% of suppliers had been paid within five days and 98% within 30 days.
Day in day out, businesses throughout the UK are doing great things all the time. It’s important to take stock every once in a while of just what these great achievements are, and the Lloyds Bank National Business Awards does just that. Recognising companies of all shapes and sizes, the list of awards categories is as diverse as it is inclusive.
Last year the top prize, Leader of the Year, was taken out by Jayne-Anne Gadhia, CEO of Virgin Money. Jayne-Anne beat other CEO contenders from top companies including ASOS, Monzo, ARM Holdings and the 30% Club. However it’s the Lloyds Bank Small To Medium Sized Business of the Year which is a category that sits close to our heart. Recognising SMEs that showcase steady growth, strong financials, displays an unwavering commitment to their customer and has a positively connected employee force, twelve companies made it as a finalist last year, with Net World Sports reigning supreme.
Entries are being accepted until June 7, with early bird registration happening until the end of this Friday, the 26th April. The night of nights will be held on November 12 at the Grosvenor House Hotel in Park Lane, London.
The 2019 categories include:
For further details see nationalbusinessawards.co.uk
It’s always sunny in Birmingham… at least that’s what the research says when it comes to the best place in the UK to be operating a small business. Findings from The Small Business Index 2019, a study recently conducted by the mobile payments company SumUp, suggest that Birmingham is the place to be. The combination of high levels of external support, the low cost of rent and high levels of investment make it a winner when it comes to the UK market.
The Small Business Index research looked at the 100 most populous cities in Europe and ranked them according to:
Birmingham topped the ranks for England, sitting overall on the table in 10th position. Just behind it was Glasgow in 11th place. While rent is higher in Glasgow, its low density pushed it up the ranks.
Overall however, it’s Spain that takes the cake, securing three positions in the top 10. A summary of the top 10 cities include:
Also featuring in the top 50 for the UK; London came in at position 17, Liverpool in 25th, Edinburgh at 38th, Manchester 44th, Leeds 46th and Leicester 47th. That rounds out the top 50.
“As ambitious minds tire of inefficient bureaucracies and hierarchies, they’re investing in their own ventures that are agile, adaptable, and customer-focused. At SumUp, we know it takes resilience and drive to overcome the hurdles associated with starting or expanding a business,” commented Co-Founder of SumUp, Marc Alexander Christ.
You can see all the findings in more detail by visiting: HERE
A loss of transitional caps, increases in the National Living Wage, increases in pension contributions, increases in reporting requirements; last week was a tough week for UK small businesses.
Monday 1st April marked the beginning of the rollout of the Making Tax Digital (MTD) programme, a change affecting up to 500,000 UK SMEs. A gauntlet was thrown down by HMRC; all VAT-registered UK businesses must now comply with the MTD programme. This programme requires firms to maintain digital accounting records as well as filing electronic tax returns using specific software; software that will cost small firms £564 each on average.
Mike Cherry, National Chairman of the Federation of Small Businesses comments, “The software required to comply with MTD alone is setting small firms back by hundreds of pounds – and that’s before you get to the time and resource needed to negotiate new software.”
A summary of other changes (in addition to the MTD programme) which saw the start of the last week being dubbed as Blue Monday includes:
Cherry summarises as, “Overall, this is a package of changes that increase the costs of running a small business. For the first time since 2010, we saw a contraction in the size of the UK business community last year. All Ministers and policymakers need to take note, and avoid bringing in new measures that would exacerbate this loss in 2019.”
Last week we touched on the latest Office of National Statistics report which told the story of optimistic UK labour market figures. Now this week, I’d rather not follow-up with a gloomy counter story straight after. However unfortunately, I can’t look the other way after the Federation of Small Businesses (FSB) published their Q1 Small Businesses Index (SBI) on 29 March.
The report echoes sounds of uncertainty, apprehensive and hold-backs in the UK small business world. Currently sitting at -5.0, the SBI confidence level at this time last year was at a much more healthier +6.0. A summary of the report includes:
But what can be done to halt this downward spiral in SME confidence levels and turn it around? In a press statement released on the very day that Brexit was originally set for, Mike Cherry, National Chairman of the FSB, commented, “small firms were told that we would be leaving the European Union today with a good understanding beforehand of what the future would hold. Instead, we’ve suffered 1,000 days of uncertainty since the Brexit referendum, leaving us unable to plan, invest and grow. Naturally, that’s impacted bottom lines. The least the Government can do now is follow the example set by Ireland and the Netherlands by providing small firms with vouchers to access the advice, equipment and upskilling they need to future-proof their businesses as trade arrangements change. Making soft loans available to small firms for this purpose is also a useful option.”
While the news is swimming with Brexit this and Brexit that, this week I’ve decided to take a more optimistic outlook. The latest UK Labour Market Overview report released from the Office for National Statistics (ONS) tells a story of sunshine and rainbows for the British labour market reporting on all-time highs and long-awaited lows when it comes to employment, unemployment and wages.
Summarising some of the key points in the report which covers the November 2018 to January 2019 period include:
However, there always is another side to the story and experts, like Senior Economist Tej Parikh from the Institute of Directors warns, “the labour market continues to have the wind in its sails, but there may be choppy waters ahead. Businesses have been steadfast in bringing on board new staff and in creating vacancies, despite question marks over the future path of the economy. Business leaders are also facing a cumulative burden of cost pressures which will limit just how high they can raise wages to attract the workers they need, while the pinch of talent shortages will begin to bite harder.”
You can read the ONS Labour Market Overview, UK: March 2019 in full by visiting HERE
While politicians decide exactly what is going to happen on March 29, leave or stay, deal or no deal, one thing’s for sure; small businesses need to prepare for whatever that outcome may be as best they can. Uncertainty hangs thick in the air with exactly what will play out in the coming weeks; it feels somewhat like an unpredictable changing weather pattern, with no clear indication as to exactly what March 29 will bring.
As a small business owner, let’s at least look to see what you can be doing to help prepare for one scenario, a No Deal Brexit:
The “Access To Cash Review” Final Report is in and the future is looking somewhat cashless. The report funded by LINK, the UK’s largest shared interbank network of cash machines, and chaired by Natalie Ceeney CBE, Chief Executive of HM Courts and Tribunals Service, is shining a very strong spotlight on the rapid decline of our cashed-up society. Coins and notes are no longer what weighs down our wallets; instead its bank cards, Bitcoins and PayPal logins.
“We’re hearing more and more talk of the ‘cashless society’. Almost every day there is another story in the media of bank branches and rural ATMs closing, or pubs, restaurants, charities and shops going cashless” Ceeney comments.
Three key findings from the report findings include:
But what impact would a completely cashless world have on those that operate small businesses? Could they all cope? This is the million dollar question and one that a National Farmers’ Union spokesperson summarised perfectly; “98% of farmers own a phone, 61% a smartphone but only 40% have signal on their farms and only 30% have a good broadband speed.”
To read the report click HERE
“Everyone deserves to be paid on time – including small businesses.” These are the words recently spoken by FSB Chairman Mike Cherry and Carolyn Fairbairn, Director-General of the CBI, an organisation which is the voice representing regional, national and international firms to policymakers in the UK. Speaking with The Times, Cherry and Fairburn talk about how at the very core of a healthy supply-chain relationship is a respectful and on-time payment culture. None of this late paying business which has been a hot topic of late; a staggering 84% of UK small businesses say that they experience problems with late payments every year.
Hats off to the FSB who since the launch of their “Fair Pay, Fair Play” campaign has been going gusto with media releases, social media activity and just generally making loud noise about it all. Even Craig Beaumont, Director of External Affairs and Advocacy, got behind the campaign with an interview which aired on BBC Radio 4's Moneybox. Beaumont opened up the discussion on the adverse effect late payments have on small businesses. Comments on Twitter soon followed from people who have experienced late payments in one way or another. “When I worked for a hotel in Kent, we regularly got furious local traders coming in who had not received payment on time. The hotel owner, an accountant, didn't pay until the Red Letter. I know some chain hotels who [sic] do the same thing, and some charities. #fairplayfairplay” wrote one user.
And this tweet from Bill Esterson, Labour MP for Sefton Central and Shadow Business and International Trade Minister, “50,000 small businesses go bust each year through late payment, often by big business & public sector. Small firms have to pay their workers and suppliers. It's only right that they are paid promptly. Proud to support such a great campaign by @fsb_policy #FairPayFairPlay”.
Business can often be all about taking risks; calculated risks. But having the confidence to invest, to make noise, to get out there and operate with a clear and decisive agenda all takes a good healthy dose of business confidence, assurance and self-belief, which unfortunately, seems to be in short supply for many UK small businesses.
Bibby Financial Services, a multinational company that provides SMEs with financial services, recently released some gloomy data on these current confidence levels. It’s no surprise that the biggest detriment hinges on the ever-uncertain situation of Brexit, as well as a downturn in sales and a weak GBP, the latter which has been slumped for a long time now at, historically speaking, some pretty low levels.
Here are some of the key takeaways from the SME Confidence Tracker report:
UK CEO of Bibby Financial Services Edward Winterton comments that “If SMEs are hesitant to invest in their businesses; it means they’re at risk of going into recession territory. Growth does not come from sitting on cash or waiting for things to get better. Conversely, even as costs are rising, I urge SMEs to look at their spending for the year and set aside capital to invest in their people, products and plans. Investment of this nature is crucial for generating growth”.
New research completed by the Federation of Small Businesses has shown that expenses attributed to government regulation and taxes are hitting small businesses in Wales, Scotland and Northern Ireland hard. Figures have been analysed as part of the annual Impact of Government Policy Index which is put together by researchers from the Centre for Economics and Business Research. The index looks at the average impact that government policy has on VAT-registered business in the UK.
In the latest report, the index highlights how business costs are sitting at record highs due to business rate hikes and changes in government policy to pensions and insurances. Any good-news stories of reductions to corporation tax are merely a drop in the ocean and have not had a substantial impact on lowering the costs for VAT-registered businesses in these regions.
Here are the stats:
There is however a substantial difference in the number of VAT-registered businesses operating in these regions. This difference could lead to slightly skewed averages. For instance London has 1,563 registered companies per 10,000 people whereas the other regions are much lighter; 897 in Northern Ireland, 774 in Wales and 735 in Scotland.
When it comes to industry sectors, the construction industry has been hardest hit, with these businesses experiencing a 28% increase in costs. This has been attributed to a combination of rising wages and labour taxes coupled with a hefty increase of 20% in manufacturing costs.
With the minimum wage rise to happen in April this year, going from £7.83 to £8.21 per hour, it looks like running costs for UK businesses are unlikely to take a nosedive anytime soon.
Mark the date in your diaries – 18 February – as a day to get vocal. The Federation of Small Businesses (FSB) is launching a new campaign that will try to stamp out the current UK late payment culture that exists. They’re asking for UK businesses small and large to vocalise their thoughts and experiences on how they have been or are affected by late payments. By businesses posting their stories on social media and using the hashtag “#FairPayFairPlay”, the FSB hopes to shine more light on the late payment culture that dampens the UK business economy.
An estimated £18bn is held up in the limbo state of late payments; where invoices have been issued but the receiver is yet to have made payment. A recent report from the Business, Energy and Industrial Strategy Committee, or BEIS, further highlights the impact that this can have, particularly on small businesses. Putting the spotlight on some key players in the retail industry, it shows how WHSmith has lengthened their payment terms to between 90 and 120 days, Boots now sits between 75 and 120 days and how it’ll take an average of 88 days for the suppliers of travel agency Thomas Cook to get paid.
FSB Chairman, Mike Cherry, has made no secret of the fact that despite the government’s best endeavours over the last few years, the culture of late payments is not getting any better. “We have had a lot of initiatives that do not work,” he has said. “The poor payment practices that run rampant through UK supply chains is a national disgrace with the country falling behind almost all other industrialised nations in our ability to pay small businesses on time. These practices are putting small businesses at risk forcing many to turn to personal credit cards or overdrafts just to survive. Sadly, we estimate late payments lead to 50,000 small businesses a year closing their doors, costing the economy £2.5 billion annually.”
What experiences have you had with late payments? Voice your thoughts and experiences on the matter across social media this February 18 and make sure you remember to use the hashtag “FairPayFairPlay”.
Cuts and competitions – they are the two factors that energy giant Npower are saying are the main contributors to their need to trim down 900 positions from their operations. The gas and electricity supplier that was founded in 2000 and has its headquarters in Swindon says that the 900 jobs will be phased out over the coming year with staff being consulted on the cuts throughout the next month.
Npower’s chief executive Paul Coffey says that Npower is forecasting “significant losses” for the year. This news of the financial pressures that Npower is under comes after the long-awaited price cap on default tariffs was rolled out in January. Ofgem, which is the government regulator for the gas and electricity markets in the UK, pushed the go button on the price cap which is claimed will help British households jointly save £1bn – based on average energy consumption this equates to around 11m households saving £76 a year. For energy companies, this means a reduction in their profits by approximately 5%.
Coffey comments, “The retail energy market is incredibly tough. Ofgem forecasts that five of the big six energy companies will make a loss or less than normal profits this year owing to the implementation of the price cap. And with several recent failures of new energy suppliers, it is clear that many have been pricing at levels that are not sustainable.”
Add on top of this the competitiveness that the energy market operates in with regards to fixed deals and it’s safe to say it’s a tough gig for these energy companies to stay burning. But is there any light at the end of the tunnel? Perhaps; as the price cap is movable, it has the ability to be increased or decreased twice a year dependant on the costs of the energy companies. Ofgem is set to publish an update on the cap in April – so watch this space.
It’s good news for UK small businesses; the Financial Conduct Authority (FCA) confirmed last week that the Financial Ombudsman Service will soon be able to be leveraged by SMEs. The change comes after a long list of differences keep rising to the surface particularly within the business banking world (think recent HBOS and Royal Bank of Scotland dishonours).
The changes are packaged up in the FCA’s new “near-final rules” which currently is looking to increase the maximum amount of compensation the ombudsman asks financial services companies to pay - up from £150,000 to £350,000. The final rules expected to be released and come into play by 1 April 2019.
Prior to this news, the ombudsman service was only available to individual consumers and some micro-businesses (ie. organisations with annual turnovers of less than £1.75m and fewer than 10 employees). However with the proposed changes, small businesses with an annual turnover of less than £6.5 million and less than 50 employees, or those SMEs with an annual balance sheet of £5 million or below will be eligible to escalate their unsettled disputes to the ombudsman.
FCA chief executive Andrew Bailey comments that “the changes we are making are as far as we think we should go within our powers, but they will provide access to the ombudsman service for a significant number of smaller businesses. Before this, their only option was potentially a costly legal one through the courts. We will work closely with them to ensure that they are ready so that SMEs are able to benefit from the new rules as soon as they come into force.”
The changes are estimated to impact approximately 210,000 SMEs across the UK who will be able to make use of the ombudsman services. This number includes a high number of charities and non-profits who will benefit greatly from this change.
The Federation of Small Businesses, or the FSB for short, are calling out to the UK government loud and clear; make firm changes to enforced payment practices or risk more Carillion-style collapses.
It’s been a year now since the major construction company Carillion collapsed back in January 2018. Employing circa 43,000 people, it’s become one of Britain’s largest construction bankruptcies. The giant’s collapse showcased the drastic consequences and effect that late payments can have on companies; when Carillion went under, they owed approximately £2bn to some 30,000 suppliers.
Mike Cherry, National Chairman of the FSB, comments that: “The collapse of Carillion was a watershed moment that brutally exposed the shocking ways that some big businesses treat their suppliers. The construction giant used its dominant position to squeeze smaller firms with late payments and unreasonable payment terms in an attempt to shore up its own precarious position. These practices did not save them and their failure has resulted in very real human consequences. Many small businesses were left with nothing for the hard work they had undertaken beforehand and given nothing in compensation after. Some didn’t survive.”
Strong words, but there is undoubtedly a lot of truth in them. And so, the FSB is proposing the Government dive head first into a three-point plan that will stamp out the poor payment practices that seem to be taking over the way many businesses within the UK do business. The three-point plan calls for reforms on:
“These reforms are not the silver bullet that will immediately bring an end to the scourge of poor payment practices but they will certainly go a long way to achieving this”, Cherry said.
Keeping your business relevant to the times as well as to your audience is crucial no matter what industry you’re operating in. Society changes, the popularity of lifestyles ebb and flow and trends come and go. If you haven’t heard of Veganuary then I’m not sure where you have been over the beginning few weeks in January. It’s all across pretty much anywhere and everywhere you look; social media, television, newspapers, advertisements across bus shelters, posters pasted across buildings… the list goes on.
Veganuary calls for people to get behind the vegan trend, inspiring and supporting them to try vegan for the month of January and maybe even, if they can, to stretch it throughout the rest of the year. And so, I’ve seen many a business that I thought would be straggling behind to grasp this concept of plant-based living paving the way. Showing them how it can be done. Not to mention the amount of profit that there can be in it.
The world is continuing to change, and so is the demand from what consumers are willing to engage in. Take Greggs for example, the largest bakery chain in the UK. Basically an institution in the north of England, they specialise in savoury meat and pastry baked products such as sausage rolls, pies and pasties. Now however, they also provide the option of a vegan sausage roll. It hit the shelves on January 3rd, which was no coincidence; Gregg’s wanted it to be available for the beginning of Veganuary. Their vegan sausage rolls have been selling out across their stores and they simply can’t keep up with the demand.
Greggs shares have increased by nearly 7% to an all-time high of £14.61. Chief executive of Greggs, Roger Whiteside, commented that “it’s literally flying off the shelves. I think it demonstrates how our business has changed. In the year ahead we will continue to innovate with products designed to reflect changing consumer tastes and by opening in new locations that make Greggs even more accessible to customers.”
Big or small, if you’re running a business within the UK manufacturing or services industries, chances are you may have found yourself struggling with being able to find the right staff with the right skills of late. With UK employment rates being at their highest since 1971, and unemployment rates at their lowest since 1975, these positive statistics mean that companies need to present attractive packages to prospective employees now more than ever, be it higher salaries and wages, incentives and perks. But you have to have the right prospective employees around to entice after all.
It’s news to no one that since the Brexit vote to leave the EU was thrown down, the numbers of EU27 nationals who are immigrating to the UK to live and work has been on the decrease. In fact, net migration from Europe to the UK is currently at the lowest point it has been in the last six years. This is a reflection one would think of both the uncertainty that hangs in the air thanks to Brexit as well as a weakening and volatile pound.
And now, reports from a British Chambers of Commerce (BCC) survey that involved over 6,000 respondents from across the country tell a loud tale of many businesses struggling to find the skilled staff they need. In the latter half of 2018, more than 80% of UK businesses within the manufacturing industry found it hard to find the specialist staff with the specialist skill sets that they were after. Furthermore, 70% of businesses within the service industry complained of the same struggle.
The UK government are currently getting all their ducks in a row in regards to the restrictions that will be placed on EU nationals working in the UK after the Brexit sun sets. It’s looking likely that immigration from the EU will be cut by 80% as well as minimum salary thresholds being extended. One does wonder just how the new restrictions will affect UK businesses when it comes to recruiting for specialist skill sets.
Director General of the BCC, Adam Marshall, comments that “business concerns about the government’s recent blueprint for future immigration rules must be taken seriously – and companies must be able to access skills at all levels without heavy costs or bureaucracy.”
As the year comes to an end, I always love a good reflection on the year that has been and is, in a matter of days, gone. I recently stumbled upon a survey that highlights the three main technical issues which UK SME owners and management claim have been their biggest technical, or IT tribulations, during 2018. In short, internet issues, GDPR compliance and cybersecurity.
A deeper dive into the 2018 survey, conducted by the tech company Q2Q, shows that:
Managing Director at Q2Q Andrew Stellakis has said that “hearing that internet issues are still responsible for over half of SME’s IT-related headaches is simply inexcusable in this day-and-age. There are plenty of things which can cause a slow connection, but understanding the root cause is key to getting the most out of our systems, employees and the working day.”
Whether you are a freelancer, or remote worker, or working from home, the library or local cafes that are your office. While I can definitely say I experience internet dropouts at home (no name shall be mentioned as to who my internet provider is), when I’m in the centre of town at a library or on a business premises, I expect the internet to always stay connected and be flowing at high speeds. I’m emailing documents, uploading to the Cloud, downloading from shared drives, messaging, chatting, video calling – the list goes on. For those that work in a more traditional office setting, it’s exactly the same only on a bigger scale; storing and retrieving important documents from cloud-based servers, video conferencing, emailing; being connected to the internet is the oxygen which helps small businesses breath in the modern business world.
Between a hard Brexit or a soft Brexit, the Norway option, the Singapore option, deals and no deals… how Brexit is actually going to play out over the next few months is anyone’s guess. This uncertainty over the future of UK and the EU plays havoc in the business world. Trying to cover all the bases of possible eventualities is pretty much impossible. Business owners around the country have needed to stay alert since the vote to leave was thrown down back in 2016, devising plans and preparing as much as possible for every possible scenario which could play out.
For those businesses that trade with the EU, Brexit throws an extremely large spanner into the mix. The Guardian published an interesting story last week about a Bristol-based online retailer who has sat in a state of limbo for many, many months. With a staff number of 85, unless there is a “Christmas Brexit miracle” (as he called it), he said he will be looking to relocate a large part of his business to Germany because of looming export tariffs to the EU. In fact, he’s already established an office in Bucharest, Romania’s booming capital, with seven staff. While for his UK-based team, he anticipates that come January, the company will have to start making staff redundant, ramping up the European-division and downscaling the British.
Financial Secretary to the Treasury Mel Stride comments that “those who are importing or exporting into and out of the EU 27, in the unlikely event that there is a no-deal at the end of March, will need to take certain steps. They need to do that now." He advises that businesses should "get a customs agent on board" or "look at the software they can use to make sure (of) their import and export declarations".
Thinking about doing things differently in 2019? Looking at where there might be gaps in your company’s employee skills? Employing an apprentice might not be something that you’ve considered before, however it can deliver value and benefit to your business, bringing with it new thought processes as well as injecting fresh ideas to the mix.
The National Apprenticeship Service’s divisional apprenticeship director Karen Woodward comments that for businesses both large and small “hiring an apprentice is a cost-effective way to both recruit new employees and up-skill their current workforce. Nearly eight out of 10 employers have said that productivity has improved as a result of taking on an apprentice.”
She goes on to say that “employers who get the most out of apprenticeships are those who are looking ahead, and seeing the potential to invest in their staff to help their business grow, improve productivity, help meet any skills gaps and add creativity and ideas.”
But can smaller businesses and SMEs support the apprenticeship model? Woodward says that apprenticeship “participation is spread across businesses of all sizes. The latest figures show that 44% of apprenticeships are offered by small employers – those with fewer than 50 employees – and 41% are at companies employing 250 people or more.”
But what are the key things you need to know about apprenticeships? (England - Other regions have different rules and different funding)
For further information and details, contact the National Apprenticeship Service or visit their website: HERE
A report has recently been released by The Registry Trust which highlights an increase in the number of county court judgments, or CCJs as they’re more commonly referred to. The year-on-year report compares Q3 of 2017 with that of 2018 and finds that there hasn’t just been an increase in the number of CCJ’s, there’s also been an increase on the number of and average value of High Court judgements too.
A summary of the report findings include:
These increases in the number of both CCJs and High Court Judgements goes to show that UK and Irish businesses aren’t just choosing to simply write their debts off; instead, they’re willing to take them down the path of legal formality, fighting back in a hope to actively recoup some of their uncollected monies.
Operating as a non-profit organisation for over 30 years, The Registry Trust provides a great source of public information on judgment and decrees associated with companies across the UK, Ireland, the Isle of Man and Jersey. They operate TrustOnline, a searchable register which provides access to the Official Statutory Register of Judgments, as well as the Orders and Fines for England and Wales. Visit their website for more information: HERE
‘Tis the season to be jolly… or so they say right? If you’re in the world of small business though, being paid on time can be an on-going battle that is not always so easily won. A recent study conducted by cloud-based accounting software giant Xero has shown that the average time for SME’s 30-day invoices to be paid is actually 40-days. As we move into the Christmas month, it’s safe to say that going by these statistics, there will be many UK small businesses that won’t be getting that cash injection delivered from Santa as they should.
This culture of late payments and the delay in being paid has many flow-on effects for small businesses. Some business owners have to dip into their own personal cash stash to keep things ticking over. Others might need to apply for emergency finance, overdrafts or bank loans just to help them through while they wait for their payments to clear.
But that’s just the actual day-to-day running of a business. What about the impact that delayed cash flow has on businesses forging forward? The report also found that “over 80% of SME owners say that uncertainty means that they can’t grow their businesses in the way that they want. What’s more, 67 per cent have to make sacrifices such as salary, holiday or hiring due to late payment.”
It’s something that shouldn’t be an issue, something that small businesses and entrepreneurs shouldn’t have to add to their list of things they have to manage. Late payments shouldn’t be an obstacle on their path to success. It’s estimated that 20% of businesses encounter an average loss of £31,300, writing off these debts. Furthermore, 9% have written off debts greater than £100,000. These late payments figures are hard to swallow for any business, let alone small businesses.
When you’re running a small business it’s needless to say that you’ve always got a lot on your plate. From staffing to financials, legalities to the competition, staying abreast of changes in your industry, changes in the market and changes in government regulations are enough to keep even the best of them up at night.
There has been an air rich in political uncertainty since the arrival of Brexit years ago. Now, as the March 2019 date becomes more and more visible on the horizon, things too seem more and more precariously balanced than ever before, and it brings with it an air of insecurity on the strength of the pound.
A recent survey conducted on over 1,000 UK SMEs by YouGov, an international global public opinion and data company showed that:
But what do the economists think will happen? Deals versus no deals, cabinet ministers resigning; there are so many moving parts that are continually affecting the strength of the pound. These will undoubtedly continue well into the lead up to March 2019, as well as long after. One thing is for sure however and that is that analysts agree it’s pretty much impossible to foresee how the exchanges rates will perform in the next few months.
Laith Khalaf, senior analyst at Hargreaves Lansdown has said that “We can expect the pound to be volatile for the foreseeable future as Brexit hopes and fears manifest themselves in currency prices. No-one can predict with any accuracy the direction of the currency so those who want to hedge their bets can exchange their pounds in stages, thereby converting at a range of different rates.”
“We’ll make HMRC a preferred creditor in business insolvencies… to ensure that tax which has been collected on behalf of HMRC - is actually paid to HMRC.” These were the words spoken by Chancellor Philip Hammond in his recent speech on the proposed 2018 Budget. Currently when companies file for insolvency, funds are dished out to other creditors ahead of the HMRC. With the changes proposed by Hammond however, it’s expected that the government will see approximately £185m extra in tax payments reach their pockets.
The proposed changes mean that those creditors owed money in the private sector will be pushed down the hierarchy. The HMRC will still remain below some other preferential creditors including the Redundancy Payment Service. However, for unsecured creditors such as small businesses, defined benefit schemes and pension schemes, they’ll all now come after the HMRC. To this, the government has countered that “other unsecured creditors - such as suppliers - are usually unable to recover any of their debts and so most will be unaffected. They currently only recover 4% of debts owed on average."
The changes are scheduled to come into effect from April 2020. Only those taxes which have been collected and held by businesses on behalf of taxpayers qualify. These include VAT, PAYE and employee NICs. Corporation tax, employer NICs or any taxes owed by business will be unaffected.
Neal Todd, Head of the Tax group at law firm Fladgate comments that “HMRC is often the first creditor to threaten to put a company into bankruptcy. Many companies will be concerned that extending preferred status to an already trigger happy HMRC will lead to more taxpayers having to fend off bankruptcy claims in circumstances where the underlying business is financially viable but suffering temporary cash flow shortages.”
You’d have to have not stepped out of your house for the last few weeks to have not noticed that the 2018 Christmas season has well and truly started. Even in saying that, you’d have to have not stepped out of the house, not turned on the television, not received any junk mail and not searched for anything on the internet via desktop, mobile or tablet; Christmas advertising has kicked off and is revving its engines in high gear.
And so we are buckled in for the next two months which is angled to consumerism. Whether it’s buying gifts, dining out for Christmas dinners after Christmas lunches or soaking up all those festive feelings, smells and tastes at the ever popular Christmas markets, we’ll all probably be pumping more into the local and global economy over the next couple of months then we would normally average throughout the rest of the year.
However, maybe it won’t be as much as it used to be. According to the Office for National Statistics (ONS), last year’s spending in December fell by 1.5%. This was after some super-strong November figures were recorded thanks to Black Friday sales. It seems that people are getting more and savvier these days in regards to when they’re making their purchases; many seemed to buy up big across Black Friday sales days presumably stocking up on soon-to-be Christmas gifts.
Lloyds Bank representative Keith Richardson commented on the 2017 figures that “it really was a blue Christmas for retailers, especially on the high street. The supermarkets managed to keep the tills ringing with sales of mince pies, Prosecco and craft gins, but even this wasn’t enough to hide the fact that non-food suffered a sluggish month.”
With a continued uncertainty this year still in play due to Brexit and the questionable strength of the UK economy, only time will tell as to how this year's Christmas impacts on spending.
Championed by the Federation of Small Businesses (FSB), the Small Business Awards highlight those small enterprises and one-man-bands that contribute a staggering amount to the UK economy. With an estimated 5.7 million small businesses throughout the UK, the awards are an opportunity to recognise and celebrate the great things being achieved by the little guys in the world of UK business
There are eleven categories of which UK small businesses and those that are self-employed can enter. Entries are free and there are no limitations to industries, sectors or the number of entries per business. Categories include:
The awards are broken down into geographic areas (ie. West Midlands, Scotland, North East etc.). Entrants that win their area category then go on to the UK final in Battersea Evolution in London on 23 May 2019
Closing dates for entries vary across the UK; with the earliest being 7 December 2018 (in the North West) to 8 March 2019 (London).
Mike Cherry, National Chairman of the FSB comments that “small businesses and the self-employed from across the UK contribute so much to our economy and our communities. The FSB Celebrating Small Business Awards recognise the best, most innovative and most determined of these, from every sector, industry and background. This is why we choose to keep entries to the awards free, and have them open to all smaller businesses and self-employed people, whether they are current FSB members or not. The entrepreneurial spirit in the UK is alive and well, with small businesses now numbering an incredible 5.7 million. Everyone should help us to celebrate that.”
For more information on the Small Business Awards or to submit an entry, visit: HERE
It’s good news for UK small businesses; the Financial Conduct Authority (FCA) confirmed last week that the Financial Ombudsman Service will soon be able to be leveraged by SMEs. The change comes after a long list of differences keep rising to the surface particularly within the business banking world (think recent HBOS and Royal Bank of Scotland dishonours).
The changes are packaged up in the FCA’s new “near-final rules” which currently is looking to increase the maximum amount of compensation the ombudsman asks financial services companies to pay - up from £150,000 to £350,000. The final rules expected to be released and come into play by 1 April 2019.
Prior to this news, the ombudsman service was only available to individual consumers and some microbusinesses (ie. organisations with annual turnovers of less than £1.75m and fewer than 10 employees). However with the proposed changes, small businesses with an annual turnover of less than £6.5 million and less than 50 employees, or those SMEs with an annual balance sheet of £5 million or below will be eligible to escalate their unsettled disputes to the ombudsman.
FCA chief executive Andrew Bailey comments that “the changes we are making are as far as we think we should go within our powers, but they will provide access to the ombudsman service for a significant number of smaller businesses. Before this, their only option was potentially a costly legal one through the courts. We will work closely with them to ensure that they are ready so that SMEs are able to benefit from the new rules as soon as they come into force.”
The changes are estimated to impact approximately 210,000 SMEs across the UK who will be able to make use of the ombudsman services. This number includes a high number of charities and non-profits who will benefit greatly from this change.
182 years is a long time to be in operation, and unfortunately, House of Fraser’s Deansgate store will not be celebrating their 183rd birthday. The iconic Manchester department store will be sadly closing its doors in the 2019 New Year, and although this outcome was a potential that has been looming on the horizon for some time, it still comes as shock and definitely a reality which is hard to swallow.
It’s far from breaking news the fact that large, high street retailers are struggling in today’s fast-growing online shopping economy. But when Sports Direct added the large department store chain to their portfolio in August this year, the future was given a fresh breath of life with plans as to how the affectionately nicknamed Kendal’s would stay afloat. Glasgow’s House of Fraser was saved by Sports Direct after they purchased the building for an estimated £95m, along with 22 other stores.
Unfortunately though, this was not to be, with reports claiming that there has been a “breakdown in talks” between Sports Direct and the Deansgate House of Fraser’s landlord. These failed conversations and the inability to reach a resolution means the loss of jobs for hundreds of employees, both for those employed directly by the department store as well as those staff working for the brands which are represented inside the store.
A #SaveKendals campaign has been launched as a last bid effort to the save the Manchester department store, instigated by Manchester councillors Pat Karney and William Jeavons. Councillors Jeavons has said that "it's shocking news. From our point of view, we want to save Kendal's. It's jobs, it's the economy, it's the history of Manchester.”
House of Fraser released a statement after the news broke of the store's closure saying: “We have suggested various options to the landlord that would have enabled us to save the store in Manchester. Sadly, these have been declined.”
Even when on holiday, as long as I have my computer, a power supply and the internet I really could be anywhere in the world and do some work. This week I chose to make Morocco my office space, a country that has for a long time been on my list as somewhere that needed exploring while residing in the northern hemisphere.
I love seeing the way other countries work, hearing the stories of how people live and what constitutes their norm. A no-lane road system – no problem. No street signs – who needs them? A tour company with no signage turning up at their set meeting point, a busy street corner, and trying to locate their tour participants quickly – I can think of an easier way of doing it but who am I to judge.
Their service levels here, on the whole, have been second to none. What the customer wants the customer shall have, an attitude that is not always replicated in my experiences in the western world. On purchase of some postcards from a little corner store my friend asked innocently “and do you sell stamps?” A quick reply followed, “no Madame but if you give me half an hour I will come back with some stamps.” A warm, genuine grin spread across my face; wow, now that’s service. This man is going to drop what he’s doing and presumably leave his shop unattended (or maybe call in a friend outside?) to go up the street to get me some stamps. Ten points for business acumen and dedication to customer service. I presume he would’ve put a mark-up on them, but to be honest, I would be okay with that, he has run up the road in 35-degree heat. Either way, he was willing to go the extra mile in the business exchange even though he already had the customer and that’s what I call great customer service.
The volume was definitely turned up at the Conservative Party Conference in Birmingham on Wednesday last week with the Theresa May government warning of an intended crack down on the crippling culture of late payments. Putting their best foot forward, the government has signalled that they will take charge of the situation by taking the lead, with a promise to ensure they’re paying their own small business suppliers within a five day period.
There will be a push for 90% of all of the invoices issued by small and medium-sized contractors to the British Government departments to be paid within five days. This a step in the right direction and one that hopefully other businesses will soon start to follow. It does beg the question though, isn’t this what any government should be doing by way of supporting not only their SME industry but all industries across the board?
Other strategies were also discussed as a way to help reduce the number of SMES affected by their serial late payer customers including the nomination of a company director who is held accountable for their company’s adhesion to meeting fair payment practices.
This comes after news last month that the government has put forward new laws that provide small businesses with access to invoice finance. This new law will give SMEs the opportunity to leverage funds from monies that are owed to them in unpaid invoices. These new laws are set to be rolled out at the end of the year, and it’s estimated that the total value of unpaid invoices within the UK SME industry is a whopping £9.5bn.
Business minister Kelly Tolhurst comments that: “These new laws will give small businesses more access to the finance they need to succeed and will help ensure they have a level playing field from which to set fair contracts with the businesses they supply.”
Visiting thirty towns across the UK over five weeks, the Small Business Saturday bus tour is back on the road from October 25. Now in its sixth year, the bus is part of a nationwide campaign offering support and stimulating growth from inside the UK small business industry.
Travelling up and down the country visiting towns and cities throughout England, Scotland, Wales and Northern Ireland, this year the Small Business Saturday UK bus starts its tour in Blackburn before finishing up in London on November 28.
Small businesses and their owners are invited on board the bus which, among many things, offers free mentioning sessions and advice; just make sure you’ve signed up online in advance using your My Small Business account.
Small Business Saturday Director Michelle Ovens comments that the mentoring component of the bus tour “really was driven by feedback from small businesses saying that what they felt they needed was more expert mentoring. They said their questions on running a business may not fit into a neat category, like marketing or accountancy, but actually, they needed more general advice and having someone to turn to.”
“So in each location, we have local mentors that businesses can meet on the bus tour. Hopefully, they’ll also develop a relationship, so they can go back and ask for help even after we’ve gone.”
At each stop of the tour, businesses will also have an opportunity to showcase their products or services using the Small Business Saturday bus exhibition table. Although there is no selling allowed due to street laws, the table can host up to 20 businesses that are able to present more information about their company. These spots must also be pre-booked through the Bus Tour section of your My Small Business account.
For more information on the Small Business Saturday Bus Tour, visit: HERE
Chasing late payments; no business wants to do it. For small businesses especially it can be their Achilles heel, stalling growth and hindering productivity at the best of times, and at the worst of times, potentially tipping a company over the edge.
A recent study performed by commercial data, analytics, and insights company Dun & Bradstreet, has found that there’s been an increase in the number of late payments made to UK businesses in the last quarter. A summary of the findings include:
Interestingly the results tell a story of how it’s the large corporations who are the biggest culprits; companies of 251 employees and over only pay 8.1% of their payments on time, a shockingly intriguing statistic when you compare it to smaller companies of 250 employees or less of which 25.7% make their payments promptly.
So what is it about the UK and this culture of late payments? Senior Economist at Dun & Bradstreet Markus Kuger comments that: “Although there is legislation in place to assist small businesses with their struggle against late payments, the majority of the time they take no action for fear of alienating their larger customers.”
Is it then that companies, especially the big ones, assume that smaller businesses will be less vocal when it comes to their credit control departments, exhibiting less enthusiasm for chasing them down because they simply don’t want to ruffle any feathers?
Either way, one would agree that there needs to be a shift in the culture of late payments in the UK, especially in an age where online payments and bank transfers are at the tip of our fingers
Every company owner knows that their business is only as good as the staff that they employ. Ensuring that your staff feel valued and appreciated is a key way of helping to keep your company staff retention rate in tiptop shape; reducing your employee turnover will ultimately save your business money in the long-run as the recruitment process is a costly process indeed.
Below are five simple ways to help make your staff feel valued and appreciated. They’re not big acts or gestures that are going to break the bank; quite often it can be the little things that help to make your staff and employees happy in the place they come to work.
A couple of blog posts ago, I touched on the two-point O version of The Grimsey Review, the independent report which forecasts grim figures of the UK high street economy. Flanked by the rise of the online shopping (amid the flourish of media reports last week heralding Amazon for reaching its trillion dollar company status, the only other company to join Apple among the ranks), also affecting high street stores and businesses are the ever-increasing rent prices and the general cost of maintaining a bricks and mortar store.
Recognizing the on-going battle of keeping things afloat, the Federation of Small Businesses (FSB) has launched their High Street Hub, a new online platform that details the help available for UK small businesses aided by government and local councils.
The platform hinges on five key areas that the FSB have recognised as being the Achilles heel for high street businesses:
National Chairman of the FSB Mike Cherry comments, “It’s clear the pressure is mounting. Spiralling business rates and ever-increasing rents are piling on to small retailers, hospitality businesses and others on the high street. The high cost of town centre parking, poor infrastructure, the blight of potholes and the loss of vital banking services are also ramping up the pressure.”
“We know that small business owners are resilient and are used to adapting to market forces. But we want to see Government and local authorities come together to look at real solutions to these issues so that our high streets are not only able to survive, but to thrive.”
Find out more by visiting the FSB’s High Street Hub, visit: HERE
Coffee is king, or so it seems it’s on the path to becoming in the UK. With numbers rising from 10,000 in 2007 to 24,000 in the present day – a whopping 31,000 coffee shops are forecast to be serving up cups of ol’Joe all around the UK come 2022. And Coca-Cola wants in on that action
With the reduction in the western world’s consumption of sugar-sweetened fizzy drinks, Coca-Cola was yet to have an entry point into Britain’s ever-growing caffeinated beverage world, until now. In a £3.9bn deal that will come into power in the first half of 2019, Coca-Cola will own 4,000 Costa stores throughout 32 countries, including 2,400 in the UK and also 8,000 self-serve express machines, like those that you see in petrol stations and the likes
Chief Executive of Costa Coffee’s owner Whitbread, Alison Britain comments that “they [Coca-Cola] have no coffee in their range. You could see Costa absolutely everywhere, in vending machines, hotels, restaurants, pubs, cafes – in all the places you see Coke today.”
Mintel research, a London-based market research company, released figures last year that forecast UK coffee shop sales to grow by 29%, becoming a staggering £4.3 billion industry. However, it was only last year that Citigroup researchers predicted that only four to five years growth was remaining in the UK coffee market, citing an over saturation of shops on UK high streets and shopping centres. Costa sits at the top with the highest number of stores, followed by Starbucks, Caffe Nero and Wild Bean Café.
But that doesn’t seem to be something that Coca-Cola are worried about. “Hot beverages is one of the few [drinks] segments where Coca-Cola does not have a global brand, Costa gives us access to this market with a strong coffee platform,” said James Quincey, Coca-Cola’s chief executive
Diversification – it’s what experts are saying UK high streets need to start being better at ahead of the seemingly on-going closure of shop after shop after shop. Between department store House of Fraser, giant retailer Toys R Us, electronics supplier Maplin and budget-friendly Poundworld (plus many others); the highest rate of retail store closures was recorded from January – June 2018 since the financial crisis.
The release of an independent report entitled The Grimsey Review 2, which has been led by former chief executive of Iceland and Wickes, Bill Grimsey, show some grim figures forecast for the story of the dwindling UK high street economy. It estimates that 100,000 shops will be empty within the next ten years, and that on top of the 28,000 jobs which have already been lost, another 40,000 are estimated to disappear by the end of 2018.
The rise in online shopping is thought to be one of the main contributing factors to this decrease in high street trade. This was most probably always written in the stars when you think that the term “high street” has origins which go back to the 12th century, where the term “high” was used to describe the most important road or street in a town. Fast-forward to the 21st century, and the term is now more generically used to describe a chain of shops or stores where shopping centres and complex are located outside of town.
But it’s not all doom and gloom – it’s just about a reshape of those business and their functions that are filling UK high street real estate. The Grimsey Review 2 recommends how town centres and their high streets need to focus more on community building ventures such as those within the leisure, entertainment, education, art and housing industries, and less on the retail.
“We have to accept that there is already too much retail space in the UK and that bricks and mortar retailing can no longer be the anchor for thriving high streets and town centres. Town centres need to be repopulated as community hubs”, Grimsey comments.
If you’re running a small business and enduring the rollercoaster ups and downs that this can ensue, then hiring staff on a zero hour contract maybe something that you’ve implemented once or twice or at least considered at some stage or another.
A formal agreement between employer and worker, a zero hour contracts guarantees just that – zero hours. There are no obligations of the employer to provide the worker with any hours, and likewise, there are no obligations of the worker to accept those hours if given. It’s a no-commitment relationship that is flexible, and of course, come with the obvious pros and cons for both parties.
In unstable economic climates or where business is extremely up and down, a zero hours contract can provide somewhat of a “get out of jail” free card for companies. Businesses within the service sector such as bars, shops and restaurants can particularly find it favourable as they’re able to tailor the number of people rostered on based on the demands of the business, scaling up or scaling down when it’s busy or not. For employees, having the freedom and the flexibility to work a variety of jobs if they so choose could outweigh the lack of security and knowledge that they have a fixed sum coming into their accounts each week.
A report has recently been released from the Federation of Small Businesses (FSB) showing that regardless of rising business costs and the high cost of employment, UK small businesses are shying away from employing workers on a zero hour contract. 84% of UK small businesses said that they did not employ workers on a zero hour contract. 60% even said that they were already paying at least £7.83 an hour before the NLW rate was increased in April this year – a very positive statistic.
National Chairman of the FSB Mike Cherry comments that “very few of our members use zero-hours contracts. Where they do, they’re creating arrangements that work for both employer and employee alike. Small firms often play host to the kinds of supportive, flexible and family-centred working environments than can be found lacking in big corporates. What today’s findings show, once again, is that they also reward staff fairly.”
Going into my local computer repair company yesterday in the Greater Manchester region, I asked the technician how his day was. “Slow”, he replied, “we’re never really busy during summer. Fewer people are sitting inside in front of their computer; they’re out and about and doing things. It’s not until around September that trade picks up for us.”
Interesting I thought and yes, it must be true. While some businesses will boom more throughout summer (I’m thinking ice cream shops, outdoor leisure and entertainment, travel and tourism businesses) there must be some on the other hand that do notice a downturn. Fewer people on their computers, fewer people inside getting cosy on their couch in front of their Netflix, and fewer people spending lazy afternoons inside in the pub avoiding the English winter weather; although it appears that maybe they just move to sit outside in the sun instead.
Who can forget the forage of media reports on the CO2 shortage that was hitting those within the food and beverage industry hard? A lack of the magical carbonating gas wasn’t necessarily because there were too many people consuming too many fizzy beverages compared to previous periods, it was more to do with the fact that only two of five plants that supply CO2 were operating at the time. Consumption was indeed up though (thank you World Cup).
A recent report from large-scale research company Nielsen released last month showed that some UK retailers experienced their biggest rise in annual revenue that they’ve seen in the last four years. Plus it seems that more people are enjoying eating and drinking outside, with a rise of 11%. And also notable was sales of hand-held ice creams which increased by 24% year-on-year.
Summer or winter it just goes to show, it’s swings and roundabouts in the world of consumer business.
You’ve done the seemingly impossible and what can be the undoing of many small businesses – you’ve made it through the first year, or maybe the first two or three. Your small business is moving along and its outlook is bright and positive.
While some businesses experience rapid success in the first few years, others will experience a slower pace of growth; potentially even feeling like someone hit the pause button on their growth chart. So how can you take your business and its profitability to the next level? Consider the below three things which although may seem simple, can be very effective when helping to cultivate success for your small business:
Statistics from back in the 1990’s had UK households at their most solvent. Fast-forward to today and the story is a lot different with the number of people taking out individual voluntary arrangements hitting a six-year high during the second quarter of 2018
There were 28,951 individual insolvencies recorded during the 2018 second quarter, which is an increase of 4.4% on the previous quarter and 27.3% on the same period last year. Across the UK it was Stoke-on-Trent who returned the highest number of personal insolvencies during 2017, ranking above those towns coming in second, third and fourth - Plymouth, Hull and Scarborough respectively.
An individual voluntary arrangement, or IVA as they’re abbreviated to, sees debtors agree to repay their creditors some or all of what they owe. High inflation, limited wage rises and cuts to benefits are singled out as being key contributors to this all-time high.
President of the insolvency trade body R3 Stuart Frith comments that: “There are plenty of reasons why people might be feeling the pinch. Wage growth is barely higher than inflation after a long period of real wage falls. Although unemployment is low, there are more people earning variable amounts in the gig economy, which can make budgeting difficult. Meanwhile, outstanding consumer credit volumes have been growing, as has the average amount of debt per head.”
With the Office of National Statistics recent report detailing how the average British household is spending £900 more than they are earning, it seems as those personal insolvency figures will only continue to increase unless there is a major change.
The Bank of England is expected to be raising interest rates in the coming weeks which analysts are hoping will encourage Britons to save more as well as having a positive knock-on effect for households overall finances. But as StepChange’s Chief Executive Phil Andrew comments, “the reality is that too many households, here in Britain, in 2018, simply cannot make ends meet, however hard they try.”
The latest release of the Central Government spend with SME’s over the 2016/2017 period show that the UK government are leaving a lot to be desired when it comes to working with small businesses. The data shows that small businesses won just over 20% of the central government’s business last year which was down 24% from the previous year.
With the official target of 33% of public work to go to SMEs by the year 2022, The Federation of Small Businesses (FSB) suggests that those larger government contracts and procurement jobs be broken down into smaller contracts and follow strict guidelines when it comes to the payment terms between government and SMEs.
The collapse of Carillion in the beginning of this year provides further ammunition when it comes to the case of spreading government procurement spend across multiple businesses as opposed to relying on one main contractor. The demise of Carillion, the facilities management and construction services giant which played a major role in many large-scale government contracts, reportedly cost UK taxpayers an estimated £148m. When the company went into liquidation, Carillion was reported to have around 420 UK public sector contracts, employing over 11,500 workers.
Chair of the Public Accounts Committee, Meg Hillier, bites back saying that "my committee is looking at the wider relationship between government and large suppliers. There are 27 other companies with large contracts across government. We need to really examine this relationship between these large outsourcing companies and government. We'll be talking to those big suppliers over the next few weeks and publishing our findings by the summer."
National chairman of the FSB Mike Cherry says however that the UK government is simply “wasting taxpayers” money when just hiring big firms. “The latest drop in central government small business spend shows urgent action is needed. Smaller firms need to be given every chance to compete and secure public contract opportunities. Opening up the public service market is a win-win for everyone involved in the supply chain because when small businesses are used effectively, they are able to create jobs and growth.”
For more information or to view the Central Government Direct and Indirect Spend with Small and Medium-sized Enterprises 2016/17 Transparency data, visit: HERE
BTO LLP associate Lewis Richardson recently wrote an interesting article published the Scottish Legal News in regards to the decision from the Sheriff Appeal Court in the case of Cabot Financial UK Ltd v Gardner and Ors,  SAC (Civ) 12. Three cases all relating to debt recovery for assigned credit card debts were raised under the simple procedure which applies to monetary claims of less than £5,000.
With 17 different appeals pending, Cabot had previously had cases dismissed because they were unable to provide relevant documentation to the claims. With this track record, the sheriffs pertaining to these reported cases requested the claimant to provide documentation even on undefended claims. However, with the common school of thought that undefended claims equal an automatic acceptation of a payable debt, it begs to ask the question, is this a power play by the sheriffs?
The simple procedure rules do encourage judicial intervention and as Richardson comments, “in the words of the Sheriff Appeal Court, a more inquisitorial approach to be taken.” With this in mind, it seems as though the sheriffs have taken it upon themselves to inquire just that little bit further, making requests for documentation even in these undefended cases. But did the Sheriff Appeal Court see this as warranted and welcomed? No, they did not; instead deciding that the sheriffs had gone too far when they ordered Cabot to produce these claim documents.
Richardson also touched on the thorny question of expenses and in partuclar, in relation to party litigatants; "One of the key goals of simple procedure was to make it straightforward for party litigants to raise and conduct without a lawyer, thereby limiting expenses. However, expenses arguments continue to abound. It is therefore perplexing that to understand the position on expenses a litigant would require to examine the rules, primary legislation and a statutory instrument and, even then, they may be none the wiser!"
He goes on "There have been several reported and unreported decisions on expenses which illustrate the fact that expenses questions are continuing to pose difficulties for both practitioners and the judiciary. If simple procedure is expected to be understood by party litigants then it cannot be desirable for them to require to consider not only the rules and statutes but also case law."
In summarizing the article and in reflecting on the lessons learned from these cases, Richardson comments that “the case outlines the limits of shrivel power in undefended claims. It is striking that a simple procedure case has resulted in a 40-page judgment from the Sheriff Appeal Court addressing this fundamental point…. If this suggests to you that simple procedure is turning out, in some respects at least, to be less than simple, then you would be correct… The rules are developing and the Scottish Civil Justice Council, who drafted the rules, recently closed a consultation in which it sought views on how the simple procedure rules were working in practice. Whether this consultation will result in any amendment to the rules remains to be seen.”
While the news that Barclays is planning to move between 40 and 50 investment banking jobs from the UK to Germany shouldn’t come as a shock, it does go against views which were previously expressed from the banks CEO back in May 2017. Barclays’ chief executive Jes Staley commented that he saw no reason as to why any British jobs at the top UK bank should have to shift to Europe at all as a result of Brexit. “We do not currently see a need in our options to shift British jobs or significant operations elsewhere”… oh what difference a year can make.
The German financial capital of Frankfurt will be the primary location for the shifted Barclays investment banking jobs. Although the positions would technically be employed from their Irish unit based in Dublin, the positions will most likely be filled by candidates based locally in Frankfurt, and not necessarily British citizens relocated from London.
Dublin, Frankfurt and Paris are the top three cities which seem to be benefitting currently from this financial services shift as a result of Brexit. Goldman Sachs is said to be splitting their EU focused team between Frankfurt and Paris, HSBC is said to be favouring Paris and JP Morgan will soon be settling 1,000 staff in Dublin.
The news comes simultaneously with the latest release from the Office for National Statistics on the current productivity Statistics for the nation. No surprise really that the economic output per hour or work has dropped in the UK by 0.4% in the first quarter of 2018. Chief economic adviser to the EY Item Club Howard Archer comments that “there is a risk that extended uncertainty and concerns over the UK’s economic outlook could end up weighing down on business investment and damaging productivity. Prolonged difficult Brexit negotiations could increase this risk.”
Good cashflow is important for any business, but for small businesses, it can be more critical than it is for large companies. With leaner financials, small businesses can carry a fragile backbone. Business operations simply can’t continue for long without a steady stream of income and so access to cash and credit is essential. If you’re not being paid on time and are constantly having to issue reminders and chase late payments, a strain is undoubtedly being put on your small business, hindering it’s growth, its development and ultimately costing you money in the long run.
Time is of the essence when it comes to debt recovery and debt collection. Staying on top of your business’ credit control function is paramount. Make sure you’re keeping accurate and up to date reports on who owes what and by when. Keep on top of those customers that have a history of late payments. You never know what is going on behind closed doors and dependant on your debtor’s situation if you wait too long to try to recover your unpaid money they may have even already shut up shop. Plus, the more time you wait then the more frustrated and strung out the situation becomes. Debt collection techniques that are centred on a cool, calm and collected approach are always the most successful.
If debt recovery is on your mind and you think you’ve exhausted your ability to get the end result that you’re looking for, speak with the team at Chamberlain McBain. As professionals in the debt recovery industry, Chamberlain McBain is a cost-effective option when it comes to debt recovery, charging only for the work carried out, and never charging commissions. Interest and compensation (where appropriate) are calculated and added to the sums due to you without charge and the free online portal allows you to keep an eye on each of cases.
Chamberlain McBain will work with you to begin the formal debt recovery process and to help ensure your small business cash flow is doing just that – flowing.
It’s a tough pill to swallow but in the world of business, sometimes it needs to be done. In a drastic attempt to save House of Fraser in the long run, 31 of its 59 department stores will be closing their doors in the early part of 2019. This plan of action comes out of a company voluntary arrangement, or CVA, which although being deemed as “unpopular”, is a necessary step to ensure the department store giant can and will continue to operate for years to come.
It is estimated that a total of 6,000 jobs will be axed as a result of the department store closedowns which sees some big stores including London’s Oxford Street, Shrewsbury and the Cardiff store, which dates back to 1856, shutting up shop. Landlords from affected stores across the UK have been outspoken in their dislike of the rescue plan which has Chinese owner Yuan Yafei planning to sell a 51% stake in the business to C.banner, another Chinese company who promises to inject £70m into the business.
Chief Executive of Naissance Capital Real Estate, Azeemeh Zaheer, the estate agent who owns the House of Fraser’s Cardiff branch has confirmed that he was “shocked” when he found out the night before the CVA plan was made public, that their Cardiff store was on the chopping block. Zaheer goes on to comment that they had been open to various options which would help the store stay open, including drastically reducing the floor size. “We had been discussing reducing the floor plate of the store and spending money on architects and surveys so we could create a viable shop for them to trade out of.”.
Unfortunately, the news of these House of Fraser store closures isn’t anything new. Media reports have been flowing thick and fast in recent times of retail store giants such as Toys R Us shutting up their high street shops. Rises in internet shopping, increased business rates/council taxes as well as a decrease in overall spending by consumers, mean that times continue to get tougher and tougher for those running physical stores made of bricks and mortar.
Add this date to your calendar; Friday 22 to Sunday 24 June 2018 and get together for The Great Get Together.
Inspired by Jo Cox, the British Labour Party politician who was tragically murdered in 2016, The Great Get Together encourages people to do just that; to get together with the people around you in a bid to foster feelings of community and support in a world that can sometimes leave people feeling disconnected and alone. The Great Get Together invites people to sign up and host a get together in and around their local community or to join one that is already happening near them. A picnic, a BBQ, a morning tea; the get together can be packaged in any way, but the end results of bringing people together are ultimately the same.
So how does this relate to small businesses I hear you ask? With more and more people deciding to venture into the world of self-employment, remote work, or the wearing of many hats in their own small business, research from the Federation of Small Businesses (FSB) shows that isolation is one of the top three difficulties that self-employed people face. Furthermore, a March 2017 report from Aldermore, a retail bank providing financial services to UK SMEs, found that 39% of self-employed respondents said they had felt lonely since becoming their own boss.
FSB’s National Chairman Mike Cherry comments, “We welcome and support The Great Get Together and other work the Jo Cox Foundation is doing to tackle the UK’s epidemic of loneliness. Loneliness can damage our economy by around £32 billion per annum and cost employers an estimated £2.5 billion a year. Loneliness can diminish productivity and creativity, both of which are so vital to the success of the small business community. A community which accounts for an annual turnover of £1.9 trillion a year – 51 per cent of all private sector turnover in the UK.”
For more information or to signup online, visit The Great Get Together’s website: HERE
There’s no denying that the world of cash is becoming less and less. In fact, it’s probably only a matter of time before the wallet or purse of generations to come have never even seen a £10 pound note or a golden pound sterling coin. It used to always be about the plastic, with customers pulling out their credit or debit cards to pay for purchases in-store. However these days it’s more about the whipping out of a smartphone as that physical connection between money and purchasing becomes less and less connected with the continued rise of contactless payments.
According to recent Worldpay figures, in-store transactions made via a contactless mobile device method has increased by an astronomical 328% - that’s 126 million transactions with a value of over £975m. Worldpay comment that a third of UK customers are using their smartphones to make payments in shops, with supermarkets being the highest on the list, followed by bars and pubs. Furthermore, Barclaycard’s “Time is Money” report proposes that “touch and go” spending will continue to increase to 317% by 2021., with 40% of contactless payment retailers expected to be completely cash-free within the next five years.
Barclaycard first introduced their contactless payment offering in 2007 and every year has seen an annual increase in contactless spending. The latest growth figures show the top 10 cities outside London to be spending via contactless mobile payments:
Barclaycard Mobile Payments Business Development Director Adam Herson, comments that “the surge in popularity of wearable and mobile payments creates exciting opportunities for shoppers and brands alike. Consumers can now choose the type of accessory or device they want and match it to their lifestyle or fashion taste, all while enjoying the speed, ease and convenience that contactless brings.”
For more information or to read the Barclaycard’s Time is Money report in full, please visit: HERE
Our Mr Murphy is heading off to New York tomorrow, taking students from Dunbar Grammar who won the Seniors Section of the School Mock Court Case Project. Joining them in New York and presiding over the case in the New York Federal Court is fellow Trustee, The Rt Hon Lady Dorrian, Lord Justice Clerk, who has issued the following:
"It is a great pleasure to me to support the Mock Trial Project as one of its trustees and to be involved in judging the international moot which will take place between Scottish and American school students, in the Federal Court, New York. For the students, this presents an amazing opportunity. The Scottish participants have already had the chance to try out their skills at home and gain considerable insight into the operation of the civil law in Scotland. Now they have the opportunity of doing that on an international stage, where they will learn something of the American, and in particular, the federal, legal system. Apart from having to prepare and conduct their case, the students have a packed programme of events. They will have the opportunity to spend a day at an American High School, to compare the experience with their own school in Scotland, and to tour the United Nations headquarters. It is hoped that it will be an unforgettable and enriching experience for them. For my own part, it is a pleasure to help the students learn about, and develop an interest in, Scots Law. We know that there are now law students whose first exposure to law as a career came from their involvement in the Mock Trial Project. It is also of great interest, and value, to me to spend time with judges from another jurisdiction."
The Mock Court Project is a registered charity, and we would not be able to run such exciting programmes were it not for the generosity of our sponsors."
In addition to Chamberlain McBain, the charity is supported financially by the likes of Brodies LLP, Ernest Cook Trust, The Gannochy Trust, the WS Society and the Chartered Institute of Credit Management.
It seems 2017 was a tough year for many people in the UK and even more so for those in Scotland. With a 25 year history, in 2017 the non-profit UK organisation StepChange Debt Charity, witnessed the highest number of people contacting the organisation needing a helping hand in their personal debt matters… a staggering 620,000 people. 20,000 of these were in Scotland.
Overall statistics from the report concluded that although there has been a decrease in the debt average in Scotland by 1.5% (from £12,677 in 2016 to £12,488 in 2017), this decrease still sees the overall debt average higher than in years before. With lower average net incomes in Scotland comparative to the rest of the UK, those in Scotland have approximately 10% more debt than the rest of the charity’s UK clients. More plainly put, for every £1 of monthly income StepChange’s Scottish clients received, they also had £9.96 of debt.
The report summarises the economic trends and societal happenings that give way to these findings, and it’s pretty much the same, usual suspects. People’s income may be increasing but the increases in the overall costs of living are still way out in front as they continue to rise at an insurmountable rate.
The report findings specifically include:
For more information or to read the StepChange report in full, please visit: HERE
It seems like the ring is being reset for another round in the fight for Scottish Independence, and this time a different economic angle is being bought to the debate. The recent release of The Growth Commission Report, commissioned by Nicola Sturgeon’s Scottish National Party (SNP), proclaims that Scotland’s independence could boost the country’s economic growth, ultimately making the people of Scotland £4,100 richer every year, all for a price-tag of around £450m.
At the centre of this reinvigorated drive and refreshed determination from the SNP is the promise that the pound sterling will stay firmly in the pocket of Scots for at least 10 years after their independence day comes. This does mean that Scotland would have their hands tied by the Bank of England’s monetary policy, but it is a major differing factor from those plans laid out prior to the 2014 referendum, and one that the SNP hopes has a major impact on the outcome of round two in the Indyref battle.
The Growth Commission Report comments that Scotland would only move to its own currency once stability in the independent country has been achieved. Measurable factors for this include the establishment of a solid Scottish central bank, stable foreign exchange rates being accomplished, and certainty among businesses being achieved.
Finances of an independent Scotland would be sustained through population, participation, and productivity. For the population, it seems the grass is greener in Scotland and a further key message of The Growth Commission Report is that Scotland immigration campaigns would be scaled up. Tax cuts would be offered for those living and working in Scotland on highly skilled migrant visas with an aim to grow net contributions and in turn, taxpayer contributions. Society inequalities such as gender pay-gaps would be squashed, helping everyone in Scotland to participate in a newly independent country. Exports would be focused on for the productivity arm.
At this stage, you might be thinking “what about the oil?” – a definite feature in the 2014 whitepaper. This time around, money from oil and gas is being put firmly into a "fund for future generations".
So, four years on and it seems a lot has changed in this economic debate for Scotland’s independence but is it enough to win over those previous sceptics? The SNP are sure hoping so.
For more information or to read the Growth Commission report in full, please visit: HERE
As we sit and read the latest news article to hit the press about how the Lloyds bank CEO is paid 95% times that of one of their average bank workers, the words “ethical banking” or “fairness” definitely float into the forefront of mind.
It’s recently been released that in 2017 António Horta Osório, CEO of Lloyds Bank, took home a pay package of £6.4m, which was already up 11% from her 2016 package of £5.8m. This came to be highlighted after the advisory group, the Institutional Shareholders Services (ISS), found a bonus stricture in play which has been described as being “complex” as well as there being a “lack of clarity in the company’s public disclosures on how bonus outcomes are actually determined”. The ISS states that “although pay ratios have not been disclosed, ISS has calculated that the CEO’s pay is 95.0 times that of the average employee in the organisation.”
Screams for banks to operate in a more open, public, and fair manner can be heard from any direction you turn. Transparency is the name of the game. Insert Ethical Consumer, a not-for-profit and independent co-operative which have created an ethical rating system not just for banks, but for a range of more than 40,000 brands, services, and products.
So in the world of finance and banking, which banks have been given the thumbs up? While it might not come as a surprise that the big bank Lloyds doesn’t feature, neither do some of the other large players such as Royal Bank of Scotland/NatWest, Santander, and HSBC; none of these guys achieved more than five out of the possible 15 points that Ethical Consumer have on their rating system.
On the positive side, physical and online/app based banks such as Monzo (who took out the top prize), Ecology Building Society, Royal London, Aviva, Triodos Bank, Charity Bank, Co-op Insurance, and Ecclesiastical Insurance all rated highly.
For more information on the Ethical Consumer app, visit HERE
Finding new customers can often be a difficult task for any business, but for SMEs, it can even be a seemingly harder task than what it is for the big guys. You don’t have access to a mountain of budget to spend on big advertising and marketing campaigns, and ultimately your reach can be pretty limited.
However, with the rise of social media marketing, small businesses all over the globe have been given a leg up. Those challenges of getting in front of new audiences have been drastically reduced specifically with the rise of social media. The likes of Facebook, Instagram, LinkedIn and many other social media platforms can easily provide a small business in Edinburgh or Birmingham with a direct connection into an audience anywhere in the UK, and in fact, anywhere in the world.
A recent addition to the Facebook paid advertising arsenal are their cross-border tools, which help businesses of all shapes and sizes find new international customers easily and quickly. By using Facebook “lookalike” audiences, businesses are able to use the profile information of their existing customer base (ie. those people who already like and follow their company page) to find people who are similar in terms of their age, demographics, interests, and a whole lot more.
“But why would a person in the Netherlands be interested in buying my product from my shop here in Manchester?” you might ask. It’s not new news that audiences are becoming more global, and therefore are becoming more open to purchasing things cross borders. Heck, ordering online and waiting by the post box for your purchase to arrive is becoming more and more standard day. Sure, it might not be applicable to those SMEs who are selling a physical service (you can’t post a manicure let’s face it), but it is very applicable to those SMEs in the products or even online service base.
For more information on the capabilities of Facebook advertising visit HERE
Last week we reported on the news that even after a positive profit result for the first quarter of 2018, the Royal Bank of Scotland (RBS) still planned to be closing a number of their UK branches. As more and more people move to online banking, the number of walk-ins and in-store queries have drastically dropped over the last four years, with the RBS reporting that they’ve experienced a 40% decrease in the number of their customers who visit branches in person, while their mobile transactions have increased by 73% over the same period.
While it’s one thing for you and I or any other individual to manage their banking through internet banking or their bank's app, it’s another thing to have such a minimal touch point if you’re also using the business banking side of things for your small to medium enterprise.
The Federation of Small Business (FSB) conducted research in 2016 on the impact of bank branch closures for small businesses, and while the research and findings may have been released just less than two years ago, it is of the opinion that the key impacts are still key impacts experienced in the present day.
Those small businesses which formed part of the focus groups recognised they experienced impacts on:
These were just three of the key findings. You can read the complete report by visiting HERE
Reports and stories of the Royal Bank of Scotland (RBS) closing one in four of their branches were coming out thick and fast only less than six months ago. The main instigator of this need for RBS to close 259 of their branches (62 Royal Bank of Scotland and 197 NatWest), and cut approximately 680 jobs? The favouring of online banking amongst in customers as opposed to the traditional walk-in methods.
In fact, RBS reported that the use of branches by their customers had fallen 40% since 2014 with an RBS spokesperson commenting that “more and more of our customers are choosing to do their everyday banking online or on mobile. Over 5 million customers now use our mobile banking app and one in five only bank with us digitally.”
But since then, Q1 profit figures have been released and what a turnaround they have seen. RBS has returned a positive profit result, actually a £1.2 billion profit result. However, there has been no word of a turnaround from RBS, no word of a reduction of any of those branch closures.
National Chairman of the Federation of Small Businesses (FSB) Mike Cherry comments that “with RBS’ finances improving, it’s disappointing to see the majority taxpayer-owned bank continuing to reduce in-person support for the public. Local businesses rely on local bank branches, as do their customers.”
Relationships with their local bank branch are often an important relationship to those running small businesses, especially in rural or non-metro areas. Access to information, services, products, and real face-to-face advice and support, are just some of the ways that small business owners feel they miss out on when their local branch shuts its doors.
Stay tuned for next week’s blog where we look further into how bank branch closures impact on UK small businesses.
Are you constantly reaching for the stress ball which has a prime position on your work desk? Whether it’s in the workplace, at home, or just in your everyday life; stress can be as debilitating as it is exhausting and counter-productive.
While a low level of stress can have a positive effect, it’s important to understand just where that level is at for you. Too much stress in the workplace and employees can be sapped of all motivation, have difficulty concentrating, are more accident prone, and can experience a reduction in productivity as their engagement levels drop. With work-related stress being a growing problem around the world, it’s affecting both the health and well-being of employees as well as the productivity of organisations.
The month of April is stress awareness month throughout the UK and it’s important to understand some of the key pressure points and situations within the workplace that can be a cause of workplace stress. These include:
Teachings from stress awareness month say that the most important point is to always look after number one – you. Recognise when you’re starting to feel stressed or anxious and learn to remedy that; slow down, take a break, and start practicing saying no to things that might just be too much for you at that point in time.
Some key symptoms of stress and tell-tale signs include:
For more information on stress awareness month, visit HERE
In a recent report released from Opus Energy, 86% of UK SMEs say that they struggle with productivity levels. At the heart of a company’s productivity level is its staff; ensuring that workers are motivated, engaged, and feel a sense of worth in an organisation is a must in order for them to the operating at their most effective.
Opus Energy Chief Operations Officer Nikki Flanders has commented that, ‘it’s a wake-up call to hear that 86 percent of SMEs across the country are struggling with productivity. Given the gravity of the situation, as business leaders, we need to think of different ways to engage with and energise our teams – we all know that our businesses are nothing without them! We need to consider reward and development opportunities in the broadest sense to boost our employee offering.”
While London was one of the worst locations with a collective 93% saying they experience productivity issues, SME’s in the North West of the UK have taken the lead after the report and are actively trying to combat these slumps in productivity in the workplace. 85% of North West businesses said they have an on-going struggle with productivity levels and so have made a conscious move to help motivate and inspire their staff through tactics which include:
Flanders goes on to say that “It’s positive to see the North Western region leading the way, reporting some of the lowest levels of productivity issues compared to other regions. Their regional employment is certainly boosted by a third of SMEs there offering a higher than average wage, and with others going above and beyond with incentives and wellbeing provisions, they are putting employees first – something we can all learn from when considering our own employee offering.”
What goes around comes around right? Well, it seems that those UK small businesses who regularly give to charity perform better than those who do not. In recent findings reported on the smallbusiness.co.uk site, the more SMEs were giving to charity then the better result their bottom line displayed.
Key findings from the research show that;
But how exactly does donating to charity help UK SME’s be more profitable? With conscious consumerism being more apparent than ever these days, donating to charity can help to attract new clients. It can stimulate discussions and provide exposure to a new audience that a business may not have been visible to before. Furthermore, employees are more engaged which in turns creates a stronger staff retention rate for a business. Employees are happier as they feel as though they are helping to make a difference, and that they are working not only for their own income but towards a greater good as well.
In additional research that was conducted by the Greg Secker Foundation, a social development charity, it was found that the 54% of their UK respondents believed that it should be the law for UK businesses to donate a percentage of their annual profit to charity. Interestingly the results show to what extent a company’s public reputation and support can be influenced by whether or not that company donates to charity. Respondents claimed that if they knew a company was giving 5% of their profits to charity:
For our part, Chamberlain McBain is delightly to be actively involved with the School Mock Court Case Project SCIO, an educational charity that this year witnessed the 10,000th student pass through it's prgramme. Expanding next year to the North of Scotland will see even more students taking part.
Anyone running a business will tell you that time is money. You hire people based on A. the business’ need for that position and B. the skills that your prospective new employee will bring to the table in order to fill that gap.
In today’s modern age, the words “freelancing”, “outsourcing”, and “remote working” are definitely buzzing around the business world more than they used to be. With some taps on the keyboard and the click of a button, you can have put a call out online and be reaching freelancers from around the world. Software or web developers in Dubai, small business accountants in Scotland, graphic designers in Canada, social media experts in India, data entry wizzes in New Zealand – the list goes on with pretty much every skill set you can think of available through freelancers for you to make the most of.
Regardless of whether it’s a specific short-term project that requires a specialist skill set, or something that could potentially be more long term, sometimes choosing to work for a freelancer may make more business sense than hiring a permanent or contractor employee.
So what are the benefits and advantages to working with a freelancer?
But where do you find these freelancers and when would be the time to utilise them? Finding the freelancers is easy, a simple Google search using the words “freelancing platform” and sit back and scroll as access to the whole freelancing world opens up. These platforms provide you piece of mind by verifying and vetting both freelancers and clients so you can be assured you’re working with legit people. Freelancers will also have been given ratings from previously completed jobs and there is generally always an escrow or similar money protection scheme which has been put in place letting both parties rest easy.
It’s been a couple of months since the collapse of Carillion; when people of the UK watched centre stage as they witnessed one of the largest construction companies in the UK crumble and dissolve right in front of their own eyes. As a company responsible for employing 43,000 people worldwide, 20,000 of those in the UK, it’s an understatement to say that many people, families, and companies were affected by the demise of a company that managed to accumulate over £1.5bn in debts.
But now that the initial dust has settled and the spotlight has been moved from one major news story to the next, let’s get an update on where things stand on the Carillion calamity story.
In an interesting case in Baden-Württemberg, Germany, industrial workers have won the right to work a 28 hour week for a period of two years in order to spend time with their families. With a constant strive to get that perfect work-life balance, it’s interesting to look around the world at other nations and see how they compare against one another.
In Britain, according to the Organisation for Economic Co-operation and Development (OECD), workers clock up on average 1,676 hours a year – which works out to be around 32 hours per week. Confining results to the European continent, Greece ranks the highest with 2,035 hours worked per year on average, followed by Poland with 1,928 hours and Latvia with 1,910. So all in all, the UK is doing okay in comparison.
However, working the hours is one thing, but productivity is a whole other kettle of fish. Research by the UK government has found that the average British can lose up to 70 working days per year because of low productivity. So how can you help to make your employees more productive at work? Ultimately they say it boils down to one key thing – keep your employees happy.
Now obviously this is quite broad; don’t different employees want different things? Well yes, while this is true at a micro level, there are some things you can do at a higher level that can help all your employees be as happy as can be within the workspace.
You can help to make your employees feel valued, appreciated, and ultimately, more productive by:
A nation’s economy is always under continual scrutiny by economists, business owners, the media, and pretty much the majority of the public. An article in The Guardian recently reported (Thursday 22 February 2018) that the UK’s economy trailed behind some of the other big EU players in the last three months of 2017. The UK's Office for National Statistics downgraded its estimate to 0.4% for the UK's growth in the 2017 fourth quarter – and economists are saying this will realistically be how it stays. This puts the UK economy’s performance at the weakest it’s been in five years.
However, a recent survey conducted by Flexspace Business, a UK provider of flexible workspaces and offices, begs to contradict this statistic, at least for where SMEs are concerned. It reported that 80% of those SME owners surveyed say that they have growth plans at the top of their agenda for 2018.
Flexspace surveyed 150 UK small and medium business owners in what they have dubbed the “Sentiment Survey”. The survey was only open to those SMEs making use of a Flexspace centre across the UK and 98% of these respondents have an annual business turnover of £5 million or less.
Let’s take a look at some of the key findings from the survey:
Managing Director of Flexspace Lee Maytum comments that “with uncertainty around productivity, the UK economy and a changing global landscape, it may be easy to assume small businesses are pessimistic about the future. Yet this survey suggests the exact opposite. Small businesses are feeling positive with plans for growth.”
Cancelled trains, cancelled buses, cancelled flights, and closed roads – a blasting of weather, regardless of its temperature can have an adverse effect on the UK economy
Over the recent week, the UK and many parts of Europe have been hit hard by the storm dubbed “The Beast from the East”. With red alerts issued by the UK national Met Office and state troops deployed from Lincolnshire, it seems it was disaster mode for the UK. As a cold front swept across the country delivering weather that was, on average, 7°C colder than what is normal for this time of year, people were warned to “stay indoors”
An extreme weather event like The Beast from the East obviously has an impact of the UK economy. Reports from The Office for National Statistics after December’s 2010 weather that included widespread heavy snow and freezing temperatures, resulted in UK retailers experiencing one of their worst Decembers on record. Retail sales dropped 0.8pc during on the months that, in the lead up to Christmas, should’ve been one of their strongest. When there was more heavy snow in both January and March 2013, the UK economy experienced a dip again with many businesses remaining closed due to the weather
The Office for National Statistics’ went on to summarise their findings by saying that extreme weather events cause a temporary drop in the UK economy’s overall economic growth. Industries that normally suffer the biggest blow in times like these include the retail sector, along with the travel, tourism, hospitality, and hotel industries as people are advised, or forced, to cancel their travel plans and stay inside.
Then, of course, there are also the costly aftermath effects of damage caused to properties and businesses such as burst water pipes and failed heating systems. But it’s not all doom and gloom, however, as once everything returns to normal, the need for trades and services to repair and restore everything back to working order pumps money back into a halted economy. Furthermore, with the rise of cloud technology, some businesses can still operate from remote locations meaning not everything has to shut down. Office based businesses that make use of cloud-based servers and emails can still have employees working from home and being productive even on designated snow days
Both the Accountant in Bankruptcy (AiB - Scotland) and The Insolvency Service (England and Wales) have released their respective figures for the last quarter. Overall, Scotland fairs better than England in both personal and corporate insolvencies
Corporate insolvencies in Scotland have decreased to 202 in the last quarter compared to the same quarter in 2016/17. Equally, personal insolvencies have decreased by 3.8% with a drop in bankruptcies of 4.2%, offset by a rise in protected trust deeds of 6.9%. The less popular DAS scheme (573 cases v 1,089 bankruptcies and 1,602 protected trust deeds) has also seen a reduction in the amount repaid, despite an increase in the number of cases of 8.5%. The report can be found here.
The Picture is different in England where corporate insolvencies increased by 4.2% on the year previous, with some 17243 companies effected. There was an increase in the number of creditor voluntary liquidations within this figure of 8.2%. Personal insolvencies saw a 9.4% increase mainly driven by the rise of individual voluntary arrangements (IVAs). IVAs increased by 19.8% to their highest ever record of 59,220. A copy of the report can be found here.
If you need any assistance, please speak with your usual contact at Chamberlain McBain
It was only six months ago that the British Retail Consortium released figures showing that, 10 years after their initial release in the UK market, contactless cards payment had seemingly “won over” the UK public.
Known also as “pay wave” or “tap and go”, the Consortium reported that contactless card payments were attributing to approximately one third card purchases. 2016 saw the first year when card payments, as an overall payment method, took the number one place in Britain over cash payments, accounting for more than 50% of all transactions.
The mindset behind this transition from cash to card payments is interesting indeed, with Niro Sivanathan, a London Business School professor, commenting that parting with cash is “psychologically painful”, whereas paying for necessities with a contactless card “anaesthetises the psychological pain that accompanies payment, seducing us into splashing out”.
Equally curious now, is a recent article in The Guardian which interviewed a number of UK residents and asked them their feelings on the cash to contactless card payment trend that is on the rise. The Guardian has stated that the bulk of respondents said that while they enjoy the ease of contactless payments they “fear the risk of fraud”, and so it seems that the public see security as an issue that stops them diving head first into the world of contactless payments.
One of the Guardian respondents, a 73-year-old man Peter, said that he and his wife were victims of fraud when their debit and credit cards were cloned after they used them in a contactless payment situation in a restaurant and petrol station.” He goes on to comment that, “I use my debit card in reliable supermarkets, but I usually withdraw enough money from a reliable cash machine to keep me going for two to three weeks. Going cashless makes you vulnerable to rip-off frauds.”
The word on the high street is that the retail sector is facing a long-term slowdown. The latest figures released by the Office for National Statistics have proved to not be as perky as many had of hoped and after a less than ideal December, both the short term and long term retail forecast is not looking overly bright. Declining wages, consumer debt and the higher borrowing costs are being blamed for this lack of consumerism on the UK high streets with many of the big names in the retail world taking a big hit.
And it is the big retail names that have been getting a lot of media attention of late as they teeter on the edge. Big brands such as House of Fraser, Debenhams, Maplins and Toys R Us have all been feeling the pinch as shoppers are no longer walking into their high street stores and instead are turning to cheaper online alternatives from the comfort of their living room sofa.
So long term then what does this mean for the big retail brands with their big retail centres? After the 2016 collapse of the 88-year-old department store BHS, more than one- third of their stores are still empty with the prospects of large-scale retail tenants who can take on such large spaces minimal, to say the least. While the likes of Primark and Wilko have taken over some, others have been transformed into many smaller shops.
Director of UK shopping centres for Hammerson Peter Cooper has commented that “with more and more shopping done online, malls and town centres need to provide experiences that can’t be enjoyed at home.”
It’s about diversifying; it’s about offering a new retail and shopping experience. Cooper goes on to give the advice to retailers and landlords; “you need to understand your market, be creative and use lateral thinking”. People are still expected to head to cities like London, Manchester or Birmingham when they want that big store experience, but even so, oversaturation is something that won’t bode well for the market.
It was announced last week that hard hit contractors of Carillion will be able to apply for a government-backed £100m support package. High street lenders are banding together to provide both individuals and UK small businesses who are owed money from the construction giant who went into liquidation in January whilst still owing up to 30,000 businesses around £1bn.
High street lenders will be supported by the British Business Bank to deliver these loans to Carillion contractors who would more than likely not be eligible for loans due to their small size or lack of viable assets to guarantee their loan security. The British Business Bank specialises in providing financing for smaller businesses and although it is 100% owned by the government, it is independently managed.
Secretary of State for Business, Energy and Industrial Strategy Greg Clark has commented that “we want to signal very clearly to small and medium-sized businesses who were owed money by Carillion that they will be supported to continue trading. The banks have responded to my request by agreeing to support businesses and individuals affected. This further guarantee will help those businesses who may not be able to provide the usual security for a loan.”
A total of 930 workers who were employed by Carillion have been made redundant since the company’s demise. The latest round of 101 employee cuts are majority back-office and engineering support staff who aren’t required by the new suppliers that are picking up the pieces from Carillion’s collapse. 2,250 jobs however have been saved, with the Official Receiver being able to safeguard certain public and private contracts across the city council and the facilities management services industry.
A representative from the Official Receiver has said that “those who have lost their jobs will be able to find support through Jobcentre Plus’ Rapid Response Service and are also entitled to make a claim for statutory redundancy payments.”
A nation’s economy needs to be in a good place to foster growth right? Well it must be looking good for Britain then as a recent report released from Digimax, a digital marketing agency based in London, has predicted that 2018 will be a year for the UK small business startups.
Their survey found that 76% of business owners claimed to be working on new business ideas, with 43% saying they are aiming to be launch-ready this year. The report found that tech startups ranked supreme over any other sector; 77% commented that the media would be playing a big role in their successful go-to-market launch strategy.
Digimax CEO’s Shaz Memon comments that "in 2016 startups received more investment than in any previous years, and that appears to have continued through 2017 and potentially into 2018. The fact that the UK is leading the way in this is fantastic news for the economy, with the ability to bring long-term growth and security.”
It seems most of those surveyed by Digimax are already business owners and that their startup ventures still in the pipeline are off-shoots to their main company and day-to-day. So if you’re new to the SME game and are just starting out, what are three key things you should be considering?
The latest figures released from The Insolvency Service are reporting a 9.4% rise year-on-year of the number of people who have declared themselves insolvent. A total of 99,196 households went bankrupt in 2017, the highest number post the last major financial crisis.
Collating all of Britain’s personal debt together totals a whopping £1.6tn as many a household turns to individual voluntary arrangements or “bankruptcy-lite” deals. These so-called rescue packages allow individuals to reorganise their debts and contribute much lower size payments in a bid to pay off their debt.
A spokesperson from The Insolvency Service has said that “one in 467 adults (0.21% of the adult population) became insolvent in 2017, up from 507 in 2016”. Credit card spending and car finance deals are thought to be at the crux of the debt, with people turning to their credit cards more and more often for their general everyday spending.
In the business world the figures have risen since last year as well. Approximately 17,243 UK companies entered insolvency in 2017, a figure which is up 4.2% on 2016. Slowdowns in the economy are blamed for the rise, along with the uncertainty created after the Brexit vote. Keep in mind too that these figures are preceding the demise of Carillion which is bound to have a major knock-on effect for many SME’s throughout Britain who are unable to keep their business’ head above water amid monies owed and debts unpaid.
It was a year ago that KPMG reported on the 2016 vs 2017 insolvency figures with the firm recounting the rise in numbers – from 1,111 in 2015 to 1,174 in 2016. Head of Restructuring at KPMG UK Blair Nimmo was reported as saying that “while it’s something to keep an eye on, it’s certainly not cause for alarm”. A year later and we’re still in the same boat; is it cause for alarm now?
It’s been the news of the week and for many, it’s come from the blind side. However, the warning signs must have been there right? One of the largest construction companies in the UK responsible for employing 43,000 people worldwide and 20,000 alone in the UK, can’t just go into liquidation one day without there being some tell-tale signs that a storm was brewing?
With the accumulation of debts around £1.5bn, many companies will be affected by Carillion’s downfall. Responsible for managing prisons, schools, hospitals, maintaining the homes of thousands of military personnel as well as having a £1.4bn joint venture contract for the new HS2 high-speed rail line, monies owed to SMEs around the country from Carillion may, in fact, be a key contributing factor to their downfall as well.
The story goes that even the company’s directors had no idea what was on the horizon. The annual company report published in March clearly stated that there was no reason to think that the company would have any financial difficulties in the next three years. Fast-forward ten months on and clearly, that is not the case. Delving into it further and it seems that investors had actually begun betting against Carillion shares way back in 2013. So what did they see then that even the company directors couldn’t make out now?
High average margins – Reporting average margins of about 4%, this is twice the standard rate for construction companies. With work contracts spanning across the globe, some of the extra margin could be a result of their high-margin work in the Middle East, but at the end of the day, if you’re not getting paid for these contracts then ultimately the cash flow isn’t there. It’s been reported that when it went bust, Carillion was owed about £400m from these seemingly “lucrative” contracts.
Late payments to sub-contractors – When the cash flow isn’t there and things are tight, you just can’t pay your subcontractors. This was definitely a sign of the trouble that was brewing for Carillion who was making some of their subcontractors and suppliers wait up to 120 days before they were able to be paid.
Hidden debts – In an effort to speed up payments to their subcontractors, Carillion made use of the Early Payment Facility which allowed their suppliers to take their invoice to one of Carillion’s lenders to be paid. These lenders would charge a fee to Carillion and so the debts just continue to mount up and up and up. At the time of their last annual report, Carillion registered approximately £850m of debt; however, this wasn’t taking into account the accumulated debt in fees which was being published under a different heading in their accounts. Not ideal.
Philip Green, chairman of Carillion has said it’s a "very sad day" for the everyone involved in the company, whether that be workers, suppliers or customers, it’s a very sad day indeed.
Things are not looking so bright and shiny on the UK high streets these days with many of the country’s biggest names returning less than favourable results for the Christmas period.
Marks & Spencer witnessed a decrease in sales across both their food and clothing arms – with slumps of both 0.4% and 2.8% respectively. In the 6-week lead-up period to Christmas, House of Fraser also saw their in-store sales fall by 2.9%. These figures were released amid news that the department store giant was looking to cut their store size to minimise their rent, aiming to reduce their overall high street outgoings by 30%.
It hasn’t been all doom and gloom however with some things turning out better than some analysts were expecting. Supermarket chains Tesco, Sainsbury’s and Morrison’s all reported rises with 3.4%, 1.1% and 2.8% respectively. There was much speculation surrounding the performance of homeware and fashion chain Next as well, but against their anticipated 0.3% fall they achieved a 1.5% increase in their total sales in the 54 days prior to December 24 – much better than expected.
The best figures however have undoubtedly come from the world of the internet with online shopping performing particularly well. In the world of AO World, in the three months leading up to the New Year they posted a UK revenue growth of 11.4%. Online fashion retailer Boohoo also saw great revenue goals achieved and have since reviewed their full year group revenue growth by 10%, taking it from 80% to 90%.
Still, amid the highs that some businesses received it’s still certain to say that the current UK economic outlook is looking a tad shaky. With Toys R Us signalling the close down of a quarter of their stores across the UK resulting in the loss of approximately 800 jobs and Debenhams shares plunging after their festive season sales drops, it certainly is looking stormy out there in the retail world.
If you or your business requires information on how to recover your debts to help maintain cash flow contact Chamberlain McBain today. Chamberlain McBain offer a wide range of cost-effective services including debt recovery, litigation and more. Get in touch with the team today by calling 0131 272 2799.
Late payments are never something that bodes well for any business – but this is especially the case for SMEs. Cash flow issues can cripple a business, and small businesses rely more than ever on the money coming in so the money is there to go out.
The latest in findings from MarketInvoice, a business finance company, forecasts that the late payments trend which the UK small business world has been grappling with recently is only set to continue, and potentially even get worse. MarketInvoice looked at over 80,000 invoices issued in 2017 from UK SMEs and found that 62% of these were paid late. Worth over £21 billion, this is up 60% from 2016. Ouch.
Let’s look at some the key findings to come out of the study:
MarketInvoice spokesperson Bilal Mahmood commented that “the problem is being compounded by 90-day payment terms demanded by larger organisations, which are becoming more common. SMEs need to understand what measures they can take to reduce the risk, such as making T&C’s clear from the outset, chasing payments down and enforcing the right to claim compensation for late payments.”
If late payments are a problem for your business, then speak with Chamberlain McBain who can offer a cost-effective option when you need to speak with a team of professionals. Unlike most other services, they charge only for the work carried out, for the most part limiting costs to those recoverable from the debtor or offering a fixed cost. Get in touch with the team today by calling 0131 272 2799.
It’s been in the pipeline for the last couple of years, and now the time is nearly here – on 25 May 2018, the new GDPR, or the General Data Protection Regulation, will come into effect. Overhauling the way both public and private sector UK businesses handle personal data, it’s forces businesses to rethink how they are collecting, using and storing personal data. Let’s look at some of the main factors you need to know about the GDPR.
You can read about it in more detail by visiting HERE
In the last blog post, I looked at the first three trends predicted for 2018 that would have an impact for small businesses, and in this post, I’m wrapping it out with numbers four, five and six:
The New Year is nearly upon us, and the end of a year is a time when I’m always reflective on the year that’s been, as well as being contemplative about the year that lies ahead. What will the New Year bring? What does 2018 have in store?
For small business owners, staying at the forefront of an industry is important, and things can change in the market fast. In part one of this blog edition; let’s take a look at three of the top small business trends being predicted for 2018:
Stay tuned for next week’s article where we look at the other three top business trends predictions for 2018.
Every day, of every month of every year, thousands of UK businesses small and large are dealing with the financial fall-backs of late payments. Along with this comes the effects of potential cash flow issues which can ultimately and scarily jeopardise a business’ ability to operate and findings from a payment processor Bacs report released back in January that showed nearly half of UK SME’s were experiencing some form of late payment.
A whopping £26.3 billion was estimated by the UK government in January this year to be owing to companies in the form of overdue payments, and at the same time that they released this figure, they also released new regulations requiring both large companies and limited liability partnerships (LLPs) to report twice a year on their payment practices including the average time it takes them to pay supplier invoices
Now, new research has been released from the Tungsten Network that continues to highlight the problems businesses are facing in regards to late payments. The report looks at the key issues faced by businesses globally that seem to hold up the stop signs up along the path of procurement to payment. Surveying 422 global businesses, the Tungsten Network has created a new benchmark known as The Tungsten Network Friction Index which provides a level of reference for future years to come in order to ascertain whether the friction of the procurement to payment process is improving or not
The survey questions were centred on payment processes and cycle time, costs and visibility. Tungsten Network’s CEO Richard Hurwitz comments that “late payments impact economic growth. Chasing payments is a source of frustration for suppliers and buyers alike. Our research shows that when it comes to late payments, clunky internal processes and slow paper-based systems are the predominant causes, leading to friction in the supply chain.”
Specifically, the research has found that leading culprits for the slowdown from procurement to payment include a high proportion of paper invoices and the manual processing of invoices; this was cited as the number one issue. Coming in a close second was businesses dealing with too many non-PO based invoices as well as a high volume of supplier enquire regarding the status of their payments.
You can view an infographic showing the research and the findings in more detail at: HERE
A recent study conducted by PayPal predicts that shoppers are set to double the amount they spend on purchases made on their smartphone. So how much are they expecting people to spend? Just a casual £27bn this year alone, with further expectations that this’ll hit £43bn by 2020. Wow.
These figures scream the importance of making sure your website is mobile optimized. What this means more specifically is can online shoppers easily view your website on their mobile devices such as smartphones and tablets. Your small businesses may already be there, with an automatically scaling website that displays nicely no matter what device it’s viewed on. However for many others this doesn’t seem to be the case, with the survey finding that only 18% of UK small businesses saying that yes, they did have a mobile-friendly website.
Let’s look at some of the other figures to come out of the survey:
Nicola Longfield, Director of Small Business at PayPal UK, comments that consumers are now “willing to go through with quite sizeable transactions on their mobile, so for small businesses, if they don’t have that secure and easy way for consumers to buy on their mobile, the chances are they will lose that sale.”
The plan for the UK economy has been laid bare by the Chancellor of the Exchequer Philip Hammond, after the Autumn budget 2017 was released last week. Hammond comments that the Budget aims to “look forwards, embrace change, meet our challenges head-on and seize the opportunities for Britain’.
But what does that actually translate to for UK small business? Previously the Office for Tax Simplification had suggested that the threshold for compulsory VAT registration be lower to £20,000 – which would have hit many UK small businesses hard; so the fact that this rate has been frozen at £85,000 for the next 2 years (at a minimum) is extremely good news. In addition to this, business rates are scheduled to be lowered by 1% from April 2018 – always good news.
So let’s take a look at a high-level of some of the Autumn Budget 2017 changes and the items that may affect Britain’s small business world:
Wages and employment
In the last article we looked at why social media is so important for small businesses; but where do you start when you’re looking to get your SME up and running? Here are four key tips to help make what can be a daunting task just a little bit simpler:
For weeks schools from across Southern Scotland have been preparing for their Mock Court. After seven weeks of tutorials, which included a visit to Edinburgh Airport Fire Service, tutors in the field of medicine, prosthetics and engineering, the students undertook their intermediary trials in the Court of Session and the High Court of Glasgow. The winning Pursuer and Defender teams from each region then went head to head in the finals in Glasgow Burgh Court before The Rt Hon Sir David Edward
The Awards Ceremony took place last night in the Signet Library where Dunbar Grammar were announced as the overall winners of the School Mock Court Case Project - Seniors, with Prestwick Academy as runners up. The award was present by The Rt Hon Lady Dorrian, Lord Justice Clerk and our Mr Murphy who is the Chairman of the Board of Trustees to the School Mock Court Case Project SCIO.
The winners will now go to New York, sponsored by Brodies LLP, to compete with a school there, as well as attend a local school, before taking in many of the sights New York has to offer
Many of the Seniors have applied to attend the Hague ICC Moot competition in the Netherlands in January 2018 against 18 other countries. Six will be selected to attend and our Mr Murphy will be leading this.
For a small business social media is more important than ever. With all of your target audience in one place, the need for a social media strategy no matter how simple or complex is definitely an area of the business which needs to be thought out. Plus, one of the best things is it’s free – apart from the time spent by someone doing the legwork in order to post content, signing up and becoming present in the virtual social world doesn’t cost you a thing.
But why exactly is social media so important for your SME?
But where do you start? Social media doesn’t have to be a daunting task and there are some simple things to keep in mind when you’re looking to create your social media platforms or define your strategy. Stay tuned for the next article where we touch on the key aspects to consider when getting your business up and running on social media.
Something’s been cooking in the oven which is the UK job market, with advertised job vacancies on the rise. Latest figures which have been released from independent UK job website CV Library show that compared to last year’s Q3, the UK as a whole has experienced a 12.2% increase in advertised job vacancies, with some cities registering a growth of over 20 or even 30%.
Much of the south of the country has witnessed strong increases with Portsmouth, Brighton, London and Bristol seeing good growth rates. With London ranking high in the top spots, this is encouraging given the general feelings of uncertainty across various markets, and which has been thick in the air particularly in the nation’s capital. What’s also encouraging to note is that the Scottish job market is streaming along strongly as well, with three key cities of Aberdeen, Edinburgh and Glasgow making it into the top ten. Northern England rounds out the other top ten places, with Sheffield, Leeds and Manchester also experiencing a mentionable job vacancy boom.
The rankings as they stand for the top ten cities that have experienced this Q3 year-on-year advertised job vacancies growth include:
When it comes to which industries have seen the most positive job vacancies growth figures, Retail sits firmly at the top with a 15.7% growth rate for a Q3 year-on-year comparison, followed by Customer Services at 12.2% and Charity at 11%.
Furthermore, it seems this business confidence for Q3 also stretched over into salary levels as well, with Scotland leading the pack in this chart; salaries in Dundee have risen 34.4% year-on-year, followed by Aberdeen at 21.2% and Inverness at 10.3%.
CV Library comment in their report that one can surmise that these strengthened figures are as a result of the lower net migration of workers entering the UK from the EU, with overall immigration traffic falling by 4.3% in the past 12 months. This decrease in the number of European workers has, in turn, led to a need for businesses to increase the salaries which they are offering to job hunters, in order to entice and charm. The big question is, can British companies support this salary increase in the long term? Only time will tell.
For a link to the CV Library full report, please visit: HERE
“Don’t reinvent the wheel” – how many times have you heard this around the boardroom table, in meetings, or among your peers and colleagues? While this is true in many cases, there comes a point as well when the need to do something different almost seems compulsory; you need to position your business differently in the market, you need to create a unique selling proposition, you need to be seen to be leading the pack and not just following – you need to be innovative.
Here are three easy tips to follow that will help to get the innovative process started in your SME:
Bitcoin – it’s all the buzz right now, and what better to throw something into the limelight than to break a few records. Even though over the weekend we’ve seen the Bitcoin price decline from $6,150 to $5,880, it’s still up overall by just a casual 42% in month alone.
"Bitcoin was designed to operate outside of the influence of governments and central banks, and is doing exactly that," said Iqbal Gandham the retail trading app eToro’s Managing Director, who have been witness to the massive increases in the cryptocurrency’s trading volumes. At less than nine years old, Bitcoin is still seen to be in its juvenile, or say teenage years; unpredictable, impulsive, and highly volatile, especially when staked up against the more traditional and conventional and currencies and assets.
But just how far could the cryptocurrency go? Analysts have suggested the potential for the price of Bitcoin to teeter around the $10,000 mark if it can achieve $7,000 over the next few days, and many investors seem to be shrugging off warnings on the risks of buying into this booming market.
Swiss bank Swissquote opened their Bitcoin trading two months ago and Ryan Nettles, their Head of FX Trading and Market Strategy comments that ”people are just wanting to be part of it", stating that much of the interest that they’ve been seeing has come from brokers, banks, and hedge funds. Interest has been strong, and maybe a bit too strong for some countries, with the central banks in Russia banning cryptocurrency trading websites while their president Vladimir Putin warned of the "serious risks" of this ballooning market.
Yet it seems all news is good news, as it adds fuel to the Bitcoin fire which is raging; Nettles further comments that “the interest really stems from the media hype." SEMrush, a data analytics specialising in search engines such as Google, recently released figures demonstrating the rising Bitcoin price had a 91 per cent correlation with people’s Google searches, indicating that the school thought, “there’s no such thing as bad publicity”, reigns true in the current world of Bitcoin.
I remember when I first realised that my Messenger was being monitored, or was at least having algorithms applied to it that helped it to recognise what I was talking to my friends or family about. It was then feeding me advertisements through my Facebook feed that were centred around these conversations – flights to Australia, travel insurance, or the latest online deals for Jamie Oliver’s latest cookbook. All I could think of was “the nerve!” – to be monitoring my private messages between myself and my family or friends and then dishing me up information or trying to get me to consume products that had been mentioned or that had come up in conversation – how very invasive, intrusive, and what an infringement on my personal privacy.
Don’t get me wrong, there are some online places where I do expect that my conversations are being monitored – I just didn’t realised that it was happening within Messenger and then being used across its vertical products for consumerism and commercial gain. I suppose maybe I am just naïve?
Online platforms however are a good example of where I do expect that the communication between myself and my buyer/seller are being monitored. As a Freelance Writer, I have a lot of communication with different people across the world via online job and freelancing platforms, with people that I have never met with before, people I have never seen face to face and most probably never will. Across these platforms I suppose I hold a degree of expectation that, for both parties protection, our conversations via messages or emails within the platform are being monitored, recorded, and stored somewhere somehow out there in all those zeros and ones. And, that if I ever needed to raise a complaint or I had an objection to something, I would be able to draw upon this information. But it turns out that this is not always the case.
It wasn’t that long ago that all through the media were the stories of how WhatsApp were refusing to build a backdoor for the UK government, who ultimately were looking to these platforms in order to gain intel on the world of terrorism, helping them to see into the black holes which are created by platforms like WhatsApp and Telegram. Applications such as WhatsApp use end-to-end encryption that scramble messages through a series of code; so there is no visibility over the content within messages that are sent, and WhatsApp only ever see metadata such as an account name or email address.
In response to this cry for help that the UK government, Apple’s Tim Cook warned that weakening the encryption of these Apps would ultimately hurt the public, as terrorists would always just find new ways to communicate. Furthermore, WhatsApp responded with the statement - “we carefully review, validate, and respond to law enforcement requests based on applicable law and policy, and we prioritize responses to emergency requests.”
Gumtree is another example of where this encryption between private sellers and other parties reigns supreme – with a quote from their FAQ’s stating “if you’re a private seller, we keep email addresses private – messages will come from a unique address that looks a bit like gobbledygook.”
On one hand I can understand and support this, on the other hand though, when/if you ever get caught in the spot where you’ve been hard done by or you know you’re in the right, and you just need the help of these platforms to prove it, the encryption that is employed just frustratingly gets in the way of justice and a lawful outcome.
Brexit – there is 100% no question around the UK government’s current stance on immigration, speaking prolifically over recent times about the “tightening up” of immigration and the firmer controls they’re looking to gain. And it seems to be having an effect, as the UK is already seeing thousands of EU citizens start to leave the country as well as less people coming into the country to settle and live.
Recent statistics released from the Office of National Statistics (ONS) show that the UK’s net migration has fallen by 25% in a year period, with Seamus Nevin, head of Employment and Skills Policy at The Institute of Directors warning that the UK could be staring down the barrel of a “brain drain”. With the continuing Brexit uncertainty over the rights of EU citizens, an environment is being created which is seeing a depletion in the number of skilled workers who are already living in the UK as well as those skilled European’s who are choosing to emigrate to Britain.
European immigrates have long been adding value to Britain’s economy by contributing to vital UK industries. Take for instance the recent research conducted by Opal Transfer which surveyed more than 4,000 businesses on their profitability throughout 2014/15 to 2015/16, and found that SMEs steered by a British Director grew at a rate of 4.5%, whereas those which were steered by a European Director grew at a figure over double that – at 10.5%.
Managing Director of Opal Transfer Gita Petkevica has said that “‘the UK business environment has enabled many of these businesses to flourish. It is important that the UK government continues to put forward policies that encourage the best in Europe and around the world to do create businesses and jobs here.”
At this stage it is still unknown what long term effect will Brexit will have on the UK economy, however the common assumption that Britain-based European led companies would most likely relocate to Ireland or continental Europe if it meant they could continue trading within the European single market seems like a pretty solid one, especially if the CEO or Managing Director isn’t tied to Britain.
Planning the office Christmas party; it’s no small feat. Regardless of how big or small your workplace is, getting the Christmas party right and planning an event that everyone enjoys can certainly be a pressure-filled task. Opinions and expectations can run high, so let’s look at some of the key elements to cover when planning your office or work Christmas party that will ensure you cover all the bases and organise a well thought out party with all the trimmings:
Your company could just be starting out or maybe you’re looking to raise extra capital for a one-off project, regardless of the motivating factor, if you’re operating an SME there may come a time where you will need to raise financing to either get your business either off the ground or help to get it in front of the pack
Unfortunately, sometimes this can be a more difficult feat for the smaller guys out there in the trading world; just as the MacMillan Committee report found in 1931 when they examined the financing of SMEs and concluded that raising long-term finance in amounts of less than £200,000 was extremely difficult. This shortfall of amounts was coined the ‘MacMillan Gap’ and, despite over the years there being a number of new initiatives and changes to the marketplace that provide more options and ways to raise finance for small businesses, it can still be a tough gig for SMEs to find the finance they need.
So what are some of financing options for small businesses?
Does your business pay into the UK Apprenticeship Levy? If not, then it’s unlikely you’ll be able to take advantage of the £10 million Flexible Workforce Development Fund (FWDF) which has just been announced is up for grabs by the Scottish Government.
The Flexible Workforce Development Fund (FWDF)is a fund set out to deliver an in-work skills training programme to businesses throughout Scotland. With a clear focus on the up-skilling and re-skilling of Scottish employees, the FWDF is in its pilot stage, with the project being given a one-year trial.
Jamie Hepburn, Minister for Employability and Skills, said that this ”unique pilot scheme will enable Scotland’s employers to make training and skills development available to their staff, addressing knowledge gaps and improving productivity. Training and skills development is beneficial for employees of all ages and levels and I would encourage all organisations subject to the levy in Scotland to get in touch with our colleagues to learn more about the opportunities available to them.”
However, as Hepburn hinted at, this fund is only available to those businesses that are subject to and have been paying into the UK Government’s Apprenticeship Levy. Introduced on 6 April 2017, the Apprenticeship Levy is payable by all UK employers who have an annual pay bill over £3 million, which accounts for all payments to employees including wages, bonuses, and commissions.
With many small businesses not meeting this £3 million pay bill threshold and therefore not paying into the Apprenticeship Levy, it means that the majority of Scottish small businesses will not able to access to development and training fund for their business or for their staff.
Andy Willox, Scottish Policy Convenor for the Federation of Small Businesses’ (FSB) has said that “unfortunately this fund will do little to help smaller employers up skill their staff, especially those who are looking to address skills shortages as the UK leaves the EU. The Scottish Government should think again.”
Making your business more environmentally friendly doesn’t have to mean massive office overhauls or major operational changes, simple things can be done bit by bit to give your business an eco-friendly remodelling. The changes you make will not only help the environment out, but can also save your small business money in the long run, as reducing, reusing, and recycling can cut down on expensive overheads and help to minimise your business’ outgoings.
Here are four simple eco-friendly tips for small businesses to easily get you started:
Cheques have been around for centuries, actually nearly four to be exact. And although you might personally struggle to remember the last time you wrote or cashed one for your own personal reasons, 75% of UK businesses say they have either written cheques by received payments by cheque in the past month.
These are findings which have recently been released in a report by Cheque & Credit Clearing Company (C&CCC), who conducted market research in July 2017 on the use of cheques across consumers, businesses, and charities. C&CCC surveyed 1,000 UK businesses over the phone, asking questions centring around their use of and attitudes towards cheques, their knowledge on cheques, and the impending change to the banking industry in regards to cheque imaging.
Cheque imaging, which enables banks to process and clear cheques faster and more efficiently by using scanned digital images, gives customers the ability to pay cheques in via secure mobile banking apps,smartphones, and tablets. Chief executive of the C&CCC James Radford, comments that the development of cheque imagine will "put cheques firmly in the 21st century" and benefit "the many individuals, charities and businesses that regularly use cheques". Set to be introduced by some banks at the end of October 2017, and by all banks by the second half of 2018, although this change in the industry has long been on the cards, the C&CCC report found that only 20% of UK businesses are aware of the cheque imaging introduction, a statistic which is largely similar to 2016 (at 21%).
Other interesting statistics relating to the use of cheques throughout UK businesses include:
But what is the expected change in the use of cheques across business industries? C&CCC’s studies show that, over the next 3 years, 38% of those businesses who are currently using cheques will no longer.
It’s safe to say that we’ve all noticed it, felt it, or have been talking about it – the recent drop of the pound Sterling. Predicted by many economists, the GBP suffered the biggest intraday drop ever in its history the morning after the Brexit vote was announced, and it’s continued to drop ever since. In the last year it’s fallen to multi-year lows, including a 16% drop against the Euro, and more than a 13% fall against the US Dollar, along with a swagger of decreases against other currencies as well.
Most economists are expecting to continue to see the pound drop as Brexit negotiations progress, however slowly that may be. The longer the EU and UK take to decide on the specifics of “divorce” payouts, trade deals, or the rights of EU citizens, then the longer we’ll all have to stand on this shaky ground and the unlikeliness that we’ll see the exchange rates go back up in favour of our national currency.
But it’s not all doom and glow, as the flow on effect from a weakening Pound Sterling does have its ups as well as its downs. A slumping GBP can make it particularly tough for those people who purchase foreign currency, or any other goods or products outside of the UK. However, for those with business in the tourism industry, it’s proving to be a much better story. Recent June reports from the Office for National Statistics (ONS) show that a record number of overseas visitors are visiting the shores of Britain, up 7% on the same month a year ago and with a 2%, or £2.2bn, spending increase. With the majority of these overseas visitors being from Europe and North America, one would hypothesize that a major contributing factor to this increase is the better performance of their currencies against ours, making a quick jaunt for business or pleasure to the UK more possible than ever before.
Regardless of who in the company is making the pay rise request, often the conversation can come out of the blue and you may feel taken aback. It’s important to remember though, that by making a pay rise request, your employee is actually showing an investment in the company, coming to your first and raising the difficult question before looking outside of the company family for other opportunities which may exist.
To give yourself the best chance of handling your employee’s pay rise request tactfully and diplomatically, here are three key tips that are helpful to remember if and when an employee requests a pay rise:
Denying a pay increase can be demotivating for employees, so if it’s deserved and the business can support it, then it’s important to reward your well performing staff. If your company can’t support the pay increase, consider other alternatives that may be possible such as extra flexibility with working hours, additional allowances at work, or a generous voucher for a dinner out with a loved one to show them that they are a valued member of staff. Be honest with your employee as to why you can’t offer them an increase at that stage in the game. If it’s regarding their work performance, then ensure that they clearly understand the steps that are in their control to help them achieve a yes next time around. And if it’s because of the company’s performance, then be honest with your employee and set another date for a review so they know the discussion is still on the table; ultimately they are bound to respect the transparency that you are offering and this will help to ensure they remain committed to your business.
Branding; it’s an essential ingredient to the success of any business. Customers look for companies with reliable, trustworthy, and likeable brands because at the end of the day, no one would choose to work with or engage with a brand that isn’t credible. But when we talk about branding, exactly what does that encompass?
Branding doesn’t just begin and end with your company’s logo, sure, this is part of it, but it’s also about a much bigger picture; about creating a unique name, image, feeling, and emotional connection with your customers when they think of your business.
So how can you create a strong brand for your business? The following are some branding tips that will help your company to truly connect with its audience and clientele base, leading them to only think of your business when they find themselves surveying the market place:
Are you staring down the barrel of bank overdrafts, seeing a slowdown in profit growth, or continually finding yourself with the unpleasant task of chasing late payments? As Brexit negotiations are in full swing, now is a pivotal time to ensure that your small business is successfully managing its cash flow; and, as Philip King, Chief Executive of the Chartered Institute of Credit Management (CICM) has said, “fixing the roof while the sun is still shining will help to head off potential issues in the future”.
Periods of uncertainty and dips in confidence when it comes to the business world aren’t often a key ingredient when it comes to the recipe for business success, regardless of whether that business is small, medium, or large. So let’s look then at some tips you can employ that will help you to stay abreast of cash flow issues, forecasting, and credit management and that will put you in good stead in this currently uncertain Brexit time:
For more information or guidance on helping your business to get on top of your cashflow or credit management, contact one of the expert team at Chamberlain McBain today.
Late payments when you’re a small business can be crippling. From paying staff, to paying suppliers, rent, taxes, and all the other outgoings; small businesses rely more than ever on the money coming in so the money is there to go out.
The Federation of Small Business reports that approximately a third of payments to small businesses across the UK are late, and with this, it results in around 50,000 business deaths per year. With an average payment of £6,142 being owed to businesses in each late payment debt, this is totalling a whopping £2 billion pounds a year across the nation.
The problems that flow downstream for small businesses who struggle with late payments being owed to them involve cash flow difficulties, bank overdrafts, and a slowdown in profit growth; late payments are crippling. In fact, reports show that of the above problems, 37% of small businesses have had to deal with cash flow problems, 30% have had no other option but seek out an overdraft, and 20% have seen a slowdown in their profit growth – all a result of having to deal with late payments.
If late payments are a problem for your business, then speak with Chamberlain McBain. Chamberlain McBain are a cost effective option when you need to speak with a team of professionals. Unlike most other services, they charge only for the work carried out, in the most part limiting costs to those recoverable from the debtor or offering a fixed cost. There are no nasty percentages of the debt taken nor do they charge inflated hourly rates, instead they provide a cost effective team of professionals who can work with you to start the formal debt recovery process and help your business out of the dark and into the light of day.
Stay tuned for next articles article where we look at some tips you can employ in your small business that will help you to manage your cash before it gets too late.
Hailing from Australia, and then living for the last 8 years in New Zealand, what I find the most fascinating about travelling throughout the European continent is just how easy it is to cross borders from one country to another and quite often, you don’t even know it’s happened. This simply isn’t something that you encounter when you live on an island country, as traveling into another country isn’t just something you can “accidently” do. In Europe though, if you haven’t seen the “Welcome to Austria” sign (if there even is one?), maybe the first thing you’ll notice is a change in the road signs, the language used in advertisements, or the licensing of the car registration plates.
I can remember one occasion recently when we were driving from the Netherlands to Belgium, the one thing we noticed that made us realise we had in fact just crossed the border was the change in the wind turbine design; the Dutch wind turbines standing almost twice as high as their smaller, orange striped Belgium counterparts. But what becomes strikingly obvious once you step out of the car or the bus or the train is the difference in costs. Obviously countries’ economies differ, but it just always intrigues me as to how we cross these invisible lines, and so quickly the price of a pint of domestic beer can change from 1.15€ to 3.50€ - a 204% increase.
For my latest boarder cross from the southern Czech Republic town of Český Krumlov into Linz, a city in upper Austria, this was much more obvious. A 2 hour train ride in the Czech Republic equated to about 4€; a 2 hour train ride from Linz to Munich, Germany – 60€.
But at the very basic level of service or goods delivery, what is the different? My favourite example of this over the past 2 weeks travelling was my Czech Republic experience aboard a Regio bus - first-class service that goes beyond any experience I’ve ever had on another country’s bus transport system; in fact, it was something more akin to travelling with an airline, and not a low cost, no-frills airline at that. Individual screens in the back of each seat that played movies, games, or music, an attendant that strolled up and down the aisle handing out headphones, newspapers, and magazines, as well offerings of tea, coffee, or hot chocolate. And all this for 6€? I can tell you it would’ve easily cost 5 times this if I was travelling on that same bus in Austria, without a doubt.
After over half a million companies started paying higher business rates in April this year, and in turn, Chancellor Philip Hammond promised a £300 million relief fund to help those small businesses which had been hardest hit. The hike resulted in some businesses facing increases of up to 50% on their interest rates, which is a hard pill for any business, let alone those in the SME sector, to swallow. And yet, although businesses started paying these higher rates in April the current lay of the land still sees the majority of them holding their breath as to when that relief is going to come.
Perhaps one could think that there have been delays because of the general election. But then again, it was only back in April that Communities secretary Sajid Javid said that there would be no delay to the relief provided to small business because of the general election and that “it’s going ahead, exactly as planned. Councils are free to start using the scheme and helping local businesses.”
However, this is not the case, and the majority of those businesses which have been affected have not seen any of this relief come their way. Mike Cherry, National Chair of the Federation of Small Businesses (FSB), has commented that “55% of small businesses told us they were planning to reduce, postpone or cancel investment in their business. Additionally, 19% of those businesses affected by increased rates said they may ultimately consider closing down or selling their business as a result of the hikes in their bills.”
In response to these delays, and to try and act as a much needed catalyst, the FSB recently sent a letter to Javid asking for the department to urge local councils immediately to implement their local relief schemes. But exactly when may these reliefs come? The FSB and Cherry have further predicted that, “looking at the current timetable, businesses won’t get any relief for another month or two at the earliest.”
Cyber security is a hot topic, especially after the recent “brute force” Westminster cyber-attack which compromised around 90 email accounts through MP’s weak passwords. A “brute force” attack is where a trial and error method, often facilitated by automated software, is used in order to determine security information such as a PIN number, or in this case, user passwords for their email accounts.
The hackers of this attack repeatedly probed passwords of MPs which were deemed “weak”, forcing parliamentary officials and administrative staff to lock politicians out of their email accounts while they tried to minimise the potential consequences.
Situations like this raise the important question as to what security measures your business has in place to ensure IT systems and information is kept as secure as possible. It’s not just company financial data which hackers could gain access to; depending on your business, it could be anything from your customer and client’s sensitive information to complete payment information. It doesn’t matter about the size or shape of your business or your industry – there are risks for every business.
So what can you do to protect your business against a cyber-attack?
A further step of action you can take is to ensure your business is as protected as possible by completing the government backed Cyber Essentials certification - a scheme that, once implemented correctly, can stop the majority of cyber-attacks. For further information on this click: here.
Forecasting is crucial to any business – small or large. Helping you to manage your company’s finances, they are quite simply a future prediction of your business’ financial performance. Obviously, when you’re first starting out, this is a difficult thing to project; how do you know what could potentially be on the cash flow horizon when you have no real historical data or past accounts to be informed from?
Regardless of this, it is important to ensure that you are creating good routines and habits for your business that will carry you into the future. If you get into the good habit of closely monitoring and reviewing your finances on a regular basis now, then you’ll be able to better predict and foresee any potential problems that could be down the line and implement strategies to protect your business from potential downfall in the future.
So what should you be considering when it comes to your small business forecasting?
Forecasting for your small business as accurately as possible is worth getting right from the beginning as it provides you with the overview of your company that will give it the best chance of survival in the long run.
According to the Department for Business, Energy and Industrial Strategy there were 5.5 million private sector businesses at the start of 2016 - a 2m increase on 2000. Small businesses account for 99.3% of all private sector businesses. SMSs employ some 15.7m people, around 60% of those in the private sector and the combined turnover of SMEs equates to £1.8 trillion - 47% of all private sector turnover.
No one starts a business thinking that there will come a time in the future when they will cease to trade. Being able to objectively look at the situation your business is in and recognising the warning signs is paramount; coming to terms with the fact that you need to set the wheels in motion and seek our professional guidance is the first step to swallowing the tough pill of potential insolvency.
As the Director or CEO of a company, there are two questions which you should look to have answered in order to ascertain whether or not the company should be moved into a phase of administration:
If the answer is no, then it’s looking likely that the company is cash flow insolvent and as a Director, it is your responsibility to recognize this otherwise you could face potential harsh legal penalties and repercussions..
It could be normal for the company accounts to have its cash flow ups and downs. Given the nature of the business and natural business cycles, it could be in the best interests of the company to battle through the rough patch, or patches. However, when these patches are no longer the exceptions but instead the norm, then that light at the end of the tunnel may be no longer be feasible to work towards.
Once the company is entered into the administration or liquidation process, it is the job of the insolvency practitioner to consider the conduct of those in positions of accountability to determine whether or not they have acted in a responsible manner or not. Therefore, as a Director, it is important to be able to demonstrate and prove from the beginning that you were taking all matters in due consideration and professional advice was sought at this stage.
There are different procedures for companies’ dependant on whether you’re operating in England and Wales or Scotland and Northern Ireland so it’s important to keep this in mind and ensure you’re seeking out the correct information and advice dependant on your location.
For more information regarding insolvency and administration, talk to the experts at Chamberlain McBain
Uncertainty reigns supreme as the 2017 General Election has resulted in a hung parliament – with the Tories dropping a staggering 12 seats, they have been unable to secure the majority that they were hoping for in advance of the soon approaching Brexit negotiations on 19 June. Doubts within a political landscape never create the best environment to see small businesses flourish. With business owners and the likes unsure what policies will be rolled out or ruled out, the path for the foreseeable future is currently a hazy one. In times like these, growth plans can be put on hold and business investments and advances can be halted all the while business owners sit tight to wait for the government to sort themselves out. Of course each political party had their hard and fast pledges and promises relating to their differing policies and, with a majority party ruling, this would’ve been clear cut. But what does the 2017 General Election hung parliament result mean for small businesses and what was in the Conservative party pipeline that could now be moved to the side line?
With all of these movements and policies being designed in a time of a more stable political environment, now it would seem as though the priority needs to be given to forming a workable government, which in turn is likely to see these pushed onto the back burner for the foreseeable future.
Election week is here, and while in previous posts we’ve taken a closer look at the proposed changes in employment laws and taxation policies, this week we take a snapshot on the SME election promises when it comes to skills, infrastructure, and investment.
Employment laws are a big ticket item and so are the proposed policies regarding the nation’s skills. On the Labour side of the fence, they are looking to:
The Liberal Democrats are pledging to:
The Tories are interested in:
Rail and road investments are something that all 3 major parties agree upon, as well as them all being behind the HS2 and Crossrail 2 rail projects. Furthermore, they also agree that more housing should be built along with more access for homes when it comes to high-speed broadband internet.
Labour are further promising to:
On the infrastructure and investment front, the Tories are promising:
Last week we dived into the different parties proposed employment law promises and this week we’re taking a closer look at the pledges being made ahead of the 2017 election in relation to taxation. There have been many cry outs recently requesting party leaders simplify the, what can be, tiresome and onerous VAT tax process. However, despite all the parties promising to sit tight on VAT rates and not increase them, there has so far been no mention of simplifying the complicated process, which would in turn make it easier for small business to complete their returns come tax time.
So what is specifically being promised then for the 2017 election by the different parties when it comes to taxation? Well Labour promises to:
A cut in business rates are first on the agenda for the Liberal Democrats, with this being a major priority for the party. Furthermore, they are pledging to:
The Conservatives are standing strong with their pledge to not increase National Insurance, a promise that was a complete backflip on their originally planned budget. The Tories have then further promised:
Employment laws, taxation, investments, skills, infrastructure… the list goes on as to the different political parties promises regarding small business’s and their election promise. SME votes hold a lot of power when it’s comes to Britain’s elections and employment laws are a big ticket item, so let’s have a look at the major parties and the Small Business election promises that are being made ahead of the 2017 election.
Labour promises to:
The Conservatives are awaiting the publication of the “Taylor Report”, which, compiled by former Adviser to Tony Blair Matthew Taylor, will look further into the “gig economy” and self-employment. Once this is out, there is an expectation that they will have further policies surrounding this. Furthermore they also promise to:
Liberal Democrats share some similarities with the proposals from the Labour party as they promise to:
With the inevitable launch of the new pre-action protocol on 1 October this year, which aims to encourage the communication between businesses and individuals when it comes to outstanding debt claims, now is the perfect time to review the practices that your business follows that helps you succeed when chasing down your outstanding small business debts. According to research conducted by Direct Line for the 2015/16 financial year, small businesses in Britain wrote off £5.8bn of bad debts, with 10% of those companies that had written off some debt indicating that they had in fact stopped chasing amounts owing £100,000 or more. A further third declared in another study, that they were hesitant to pursue slow-paying customers as they were empathetic to their situation and didn’t want to upset them further or make them feel embarrassed. However, the world of small business is tough, and late payments and unpaid monies can be the curse, and downfall, to your small business. Consider the following tips for when chasing down your outstanding small business debts:
If you feel as though you have exhausted all the options, however your business is still not seeing any results, then perhaps it is time to start the more formal debt recovery process. This is when you should speak to Chamberlain McBain.
The times are a changing - on 1 October to be exact, and this time with the adoption of the new pre-action protocol for debt claims, that aims to encourage communication between the two parties in a hope that the issue will be resolved before getting into the courtroom. The concept of this new protocol goes as far back as 2010, when Lord Justice Jackson endorsed the idea of the establishment of a pre-action protocol (PAP) for debt claims. Seven years and a number of draft proposals later, this new PAP is applicable to any business (including sole traders) who are chasing outstanding debt payments from individuals (not including business-to-business debt, except where the debtor is an individual like a sole trader and although not specified, an unincorporated partnership) and defines the issue management the Court expects before a Claim Form is issued. One of the key changes is reflected in the “Letter of Claim” form, which has been bulked up and now calls for more attention to the details surrounding the specifics of the debt. This includes things such as detailing, if an oral agreement, the where, the when and the what words were spoken by both parties in order to create the agreement. Or, if a written agreement, specifics such as the date, the parties involved and an ability for the written agreement to be able to be provided by the creditor. Furthermore, a statement of accounts attributed to the debt needs to be enclosed, ideally up-to-date, but if this is not possible, then the most recent statement which is possible including the amount of interest incurred. The debtor has a 30 day window to reply; failing this, the creditor then has the ability to instigate the court proceedings. The impact to creditors could be significant as some debtors may well use the 30 days as a way of extending credit terms and by delaying payment may impact on cash flow. Delaying the issuing of the demand letter will surely become a thing of the past as Credit Controls will have to keep a tight reign on defaulting debtors. Likewise, failing to obtemper the new rules could see court action being dismissed which will prove costly to creditors. Once rolled out in October, these changes will apply to both England and Wales, with thoughts that Scotland will surely not be too far behind. But will the new PAP indeed do what it’s setting out to do and reduce the number of claims coming before the court? Perhaps, however, given that there are plans to launch a new Online Court in 2020 which any claims under £25,000 (ultimately the vast majority) are not required to have gone through a PAP, then it may in fact have a short expiration date indeed. For more information or to view the new protocol in full, visit here
After thousands of small businesses were hit by recent government changes to business rates it looks as though they will be dealing with another setback – this time with the delayed arrival of the £300 million relief fund which was promised as a counterbalance to the financial tough times that some are now finding themselves in. Coming into effect 1 April 2017, the controversial business rates revaluation saw small business property rates increased reflective of their new property values recognised in the latest valuations. At the time the hike was disclosed, Mike Cherry, the National Chairman of the Federation of Small Businesses, said that the increase in business rates would “leave many UK entrepreneurs considering the future. Despite welcome interventions from the Government at the Budget, small firms in pockets throughout the country are still vulnerable to staggering increases”. The Government was subsequently put under pressure to provide support to reduce this potential economic impact despite their claims that three quarters of businesses would not be affected at all with rates either staying the same or falling. However, since the new rates went public, these heavy increases have threatened some small businesses dramatically with research from CVS (a UK business rent and rates reduction specialist) showing that the average rateable value of shops in England and Wales has increased by 8.5%. But this is just the tip of the iceberg, with businesses in other areas increasing by more than 100%, a rise simply indigestible for a lot of small to medium enterprises. The Government recognised in the recent Budget that this new rates system was unfairly hitting some, with a number facing astronomical increases and so pledged to deliver the £300 million relief fund in order to mitigate some of the negative impact that small business were feeling. However, its release is being caught up in bureaucracy and red tape, and despite the Department for Communities and Local Government having completed their implementation consultation, businesses are now waiting for the Government to publish their response which could take several months given the quick-fire election which is now absorbing much of the government and political agenda attention in the UK.
It’s hard for any business, regardless of the product, to compete with companies that come in and undercut current players with lower-priced alternatives. The price point that these aggressively marketed products and services can often come in at makes consumers and their competitors do a double take, as everyone wonders “how can they do it so cheap?”. And that’s precisely what is believed to be a main contributing factor in what has caused Toshiba, the 142 year old Japanese tech powerhouse, to be teetering on the edge of a fall from grace. Toshiba’s recently released financial report has cried out that there is “substantial doubt” about the company’s ability to continue manufacturing the electronics such as TVs, phones and computers that it has been in the business of doing so for so long. Over the first nine months of the fiscal year, Toshiba has reportedly lost US$4.8 billion ( £3.8 billion) and warns that the loss could easily hit the US$9.2 billion mark ( £ 7.4 billion) by the end of the year. Once a major player in the production of home electronics, over the years it has stopped producing the televisions and desktop computers that it was known for, now simply focusing its efforts on laptops, hard drives, telecommunication systems and other accessories. Unfortunately for Toshiba however, it has failed to produce over the last decade any one major market-enticing product that has seen it convincingly compete with other highly-competitive electronic producing companies. But it’s not only the cheaper competitor products and Toshiba’s inability to produce a flagship, best-seller that’s led them down this dire financial-situation garden path. Their US nuclear unit, Westinghouse Electric, recently filed for bankruptcy after the 2011 nuclear disaster in Fukushima. Although it seems that this was maybe too little too late as major dents have already been left in the wallet of the company, with billions of US dollars in overruns costing them dearly. Still, their attention now turns to efforts of selling a majority stake in the business in order to keep it afloat. After numerous delays before the actual release of their financial report, the report was finally released without the final tick of approval from Toshiba auditors and, without their acceptance, it could see Toshiba being dropped from the Tokyo Stock Exchange. Troubled times ahead for a company that was once a major player in the technology market.
Large firms will soon have to publish figures in order to make public the pay gaps that exist between male and females who are performing equal jobs. The new law will see large British companies (those with more than 250 employees) be required by law to publish four figures each year; the gender pay gap, gender bonus gap, how men and women rank in terms of pay within the organisation, and the proportion of men and women receiving bonuses.April 2018 is the deadline for companies to present these figures which aim to close the wage gap that exists between the two genders. These figures will be required to be made available on both the company’s own web site as well as a government site, with information not needing to be necessarily certified, as it can be provided by each company independently. A report from 2016 found that women earned, on average, 18% less than men. Minister for Women and Equalities, Justine Greening, said, "helping women to reach their full potential isn't only the right thing to do, it makes good economic sense and is good for British business.” Consulting firm McKinsey Global Institute has estimated that reducing the gender wage gap could result in an additional £150 billion being fed into the country’s annual gross domestic product by 2025. This announcement comes after Iceland’s push in March to make employers prove that equal pay for both men and women is offered across the board regardless of ethnicity, sexuality or nationality. This was stipulated for employers with more than 25 employees, which calls for companies to become certified in order to prove that there is no difference in pay amongst differing genders that are doing the same work.
On the 6th April 2017 sees the introduction of The Reporting on Payment Practices and Performance Regulations 2017, where by large companies and organisations (public or private, listed or not) must report every six months in terms of the payment practices (among other things). The must disclose the percentage of payments that were made under 30 days, between 30 and 60 days or over 60 days and the reporting must be filed on a government website within 30 days of the end of the six month period. However, despite the introduction of the new regulations in April 2017, organisations need only start reporting once the start of their financial year is after 6th April 2017. So if an organisation's financial year starts on 1st April, they will not have to make their first report until 30th October 2018. Further, the reporting only affects organisations that meet any two of the following three criteria that determines a large company (reviewed periodically): Turnover for the given period exceeds £36m, Staff numbers are greater than 250 and the balance sheet total exceeds £18m
Personal income. Time. credibility. The cost of debt for your small business can be big. Values as high as £11.6 billion a year have been estimated for the costs attributed to small businesses in England and Wales by survey findings from the Federation of Small Businesses. In a five year period, chasing unpaid debts is an action that 70% of small businesses have had experience with. And when it comes down to it, the personnel resources, time and the costs of chasing down monies owed can be a taxing activity. Small business operators, General Managers, Managing Directors and the like, may believe their time is well spent on making calls regarding outstanding payments. But general internal credit control, continually reminding customers about payments needing to be made and chasing invoices early isn’t always going to lead to healthy, ongoing cash flows. So at what point should a business, no matter how big or small, look to take a different approach to the matter and try something new? Weighing up the time you/your business is losing chasing distant customers is definitely a good place to start. How much time could be spent on developing relationships with customers that will “come through with the goods” as opposed to wasting time on those that should be left by the wayside so you can focus your endeavours on what lies ahead? There is no doubt about the cost of debt - especially when it comes to the timesheets and the payroll for a small business. The question is, how much is too much for the enterprise to absorb and when is it in your best interests to remove some of those pressures and free up your time? If you're wondering if you’ve reached that point, then get in contact with Chamberlain McBain - we know that each and every client is different and will consult with you to find a solution that works.
Calls have been made for the next bailiff reform after a recently released report authored by seven major UK debt charities describes how current laws are not adequately protecting those who are in vulnerable situations. This comes on the 3 year anniversary of the last reform which, in 2014, saw the government impose tough new restrictions on bailiffs that the then Justice Minister Helen Grant commented would ‘help to clean up the industry and ensure bailiffs play by the rules.” The 2014 changes focused on putting a stop to the aggressive nature of some bailiff collection techniques such as performing house visits after 9pm, taking household chattels such as white goods or entering homes when only children are present and rejecting sensible repayment arrangements. This new report instigated by debt charities such as Advice UK, Money Advice Trust, and Z2K, looks at evidence which has been gathered from their clients post the 2014 reform and provides multiple arguments and case studies as to why there is still work that needs to be done in the bailiff industry to make things “fairer”. The report writes that “people contacting debt advice charities still report widespread problems with bailiffs – now officially known as enforcement agents – and our evidence suggests that in the absence of an independent bailiff regulator, or a clear and accessible complaints mechanism, the new regulations are being contravened by many bailiffs in practice.” Chamberlain McBain supports the general recommendations of the report and specifically, attending the premises of the vulnerable or where children are present. Chamberlain McBain has always encouraged it’s clients to look seriously at any sensible repayment proposal and to use enforcement officers only as a last resort. Chamberlain McBain will refuse to use any enforcement agent where it is shown they have entered premises illegally, where only children are present or have dealt with vulnerable people is a less than appropriate way. The full report can be viewed here.
March 29 2017 is the date set for the UK’s formal declaration of the intention to leave the European Union, with the wheels being set in motion as British Prime Minister Theresa May triggers Article 50 of the Lisbon Treaty. It’s expected that the bill, which is being dubbed by many as “UK’s divorce bill”, will set the country back around £52 billion - a number Jean-Claude Juncker, president of the European Commission, says is “not a punishment”, but simply the cost attributed to settling Britain's outstanding liabilities. He goes on to say that the bill simply reflects “former commitments [made] by the British government and by the British parliament. There will be no sanctions, no punishment, nothing of that kind”. These commitments are centred around project costs that the UK had previously agreed to help fund, unpaid spending commitments, as well as EU official pensions, property and repayable loans. EU negotiations, Juncker confirms, will be done is a friendly and fair way, and he goes on to say “we are not in a hostile mood when it comes to Brexit because I do think, and I do want, and I do wish to have with Britain in the next decades a friendly relationship”. Reports claim however, that Britain will attempt to recoup some of these imposing costs by claiming a significant share of the £127.5bn worth of European Union financial assets, despite May having received advice from Government lawyers dictating how Britain could legally leave without paying. A draft copy of the EU’s negotiating strategy which has been recently leaked by the Dutch newspaper De Volkskrant, quotes an official as saying that if Britain did refuse to pay, that the EU would take the matter to the International Court of Justice in The Hague. Once Article 50 has been triggered on March 29, the next key date is April 29, which sees all 27 EU leaders gather to discuss further Brexit plans.
With Ms Sturgeon’s calls for Scots to cast another vote on the question of yes or no to becoming an independent Scotland, claims are flying left, right and centre over the facts that Nicola Sturgeon may be guiding Scotland "over a cliff like lemmings to economic ruin" - a brazen vocal point made recently by Richard Drax, Member for South Dorset. The comment is representative of the arguments for and against Indyref2 that are running thick and fast. At the centre of the debate is the effects that the vote for independence from Britain is bound to have on the export and trade industry, stinging it hard. The value of the UK market to Scotland when compared to that of the EU can’t be denied; recent statistics published by the Scottish Government showed a drastic difference in the 2015 value of sales to Britain, worth almost £50 billion, compared to the EU, sitting at a much less lucrative £12.3 billion. Keith Brown, Scotland's Economy Minister, commented “that since the vote to leave the European Union, [Scotland] must continue to be seen to be a country that is outward facing and open for business. The EU market is eight times the size of the UK market, which highlights the importance of remaining in the single market. I want to be clear that Scotland should not face a choice between exporting to the EU or UK. We can do both.” Additional anti-independence campaigning is centred around the heart of the Scottish economy – the oil industry, which has the North Sea contributing £10 billion to the Scottish economy. The key to this point is the fact that, as oil reserves putter out, high costs and hefty bills loom on the horizon associated with the decommissioning of equipment no longer needed for operations. These bills, spread across oil companies and taxpayers, will be a whole lot harder to swallow when the population of paying taxpayers helping to foot this bill is drastically reduced from the whole of the UK to just the Scottish taxpayers. Furthermore, with some major financial institutions already signalling that they would likely move headquarters and jobs out of the UK and into mainland Europe as Brexit changes are rolled out, they’re also thought unlikely to remain in Scotland even if the country is to leave the UK and rejoin the EU. However, in a recent speech Sturgeon argued that Scotland would become a magnet and hot spot for talent and investment across the UK if it stayed in the EU single market. Then there is the currency debate. In the 2014 referendum the “yes” campaign promised that both the pound would be retained as the Scottish currency and the country would still be part of the EU, however, now the question must be asked and answered as to how quickly an independent Scotland would be able to re-enter the EU. It is not 100% that Scotland would keep the pound if it claimed independence from the UK and, as it has to reapply for EU membership it’s not guaranteed to be able to take the euro that easily either. Could the need for a new currency be looming on the horizon? Some experts have rejected all these economic cases opposing the Scottish independence, arguing that the information pertaining to areas against the vote has either been broadly estimated or are based on insufficient evidence. London Professor and Tax Expert Richard Murphy points out that there is bound to be a change in the economic environment of the country as the “government of an independent Scotland will have a very different structure to that imposed now”, so therefore how could the final outcome be forecast as the economic environment of a new Scotland would ultimately be moulded and governed differently. With a whole lot of things not for sure, one thing definitely is and that is to watch this economic space of Scotland as irrespective of the Indyref2 vote, things are changing.
Theresa May says “now is not the time”, but Nicola Sturgeon is all for it. Announcing plans to seek another Scottish independence referendum in either 2018 or 2019 is something which Sturgeon has made clear was on the cards since the results were known from the 2016 Brexit vote. Which isn’t unexpected really, with 62% of Scottish voters expressing they wanted to stay in the EU and only 38% voted to leave. It’s no wonder then that Sturgeon is calling for the referendum, saying she is representing the majority of Scottish people. The previous Scottish independence referendum was held in 2014, and it saw Scotland vote against the independent move away from Britain; 55% to 45%. However May is calling for Sturgeon to hold fire until the end of the current Brexit negotiations before asking Scotland to make a decision on the independence movement, so they have all the information at hand on how Brexit is playing out. Furthermore, Sturgeon can’t just call for the vote and make it happen, as there is the need to get Westminster’s okay. With May claiming that there would be no chance of a vote before at least 2021, people must vote once Brexit has been and gone, waiting until long after the UK has left the EU. There are some big arguments circulating around for and against the vote, but economically speaking, what would Scotland's potential independence mean for the country? How would the country fare up out on it’s own and what impacts on the currency, trade, and services industries could be expected? Read more on this in tomorrow's blog “The Economic Impacts of an Independent Scotland”.
Student loan. Car loan. Credit card overdraft. Buying your first home. There will undoubtedly be a time in most people’s lives where debt looms on the horizon. Not all debt is the same though, and some of these situations shouldn’t automatically come with the negative connotations attached to a word that so often makes us flinch. Good debt could be a low interest loan, or taking out a mortgage to buy a home; something which puts you in a better position long term than where you started in the beginning. A student loan for example, could provide you with the leg up needed in your industry, giving you the ability to secure a more lucrative job down the track because of your higher qualifications and skill level. Of course you can’t always know how things will turn out and to make a “good debt” decision isn’t a 100% guarantee to always stay that way. A loan to get your tech startup business off the ground may not actually help you get it off the ground at all, instead sending you down a different path altogether. Or maybe that house you were so sure was in an up and coming neighbourhood could see its value plummet dramatically when the housing market takes an unexpected dive. It doesn’t have to always be doom and gloom however when it comes to personal debt. The important factor to remember is that layering debt upon debt is not the answer and will never be a good way to approach the situation. Consider what is necessary and whether or not the step into debt will more than likely benefit you long term. Always have a contingency plan, as life can take unexpected turns at any point and you need to ensure you’ve always got a get out of jail free card handy in your back pocket.
Chamberlain McBain are proud to be the principal sponsors of the School Mock Court Case Project. As part of that role, we organise the finals for the Juniors section on 27th February 2017 which will be held at Central Hall in Edinburgh. Presiding this year will be Judge Forrester, The Rt Hon Sir David Edward and The Rt Hon Lord Armstrong. Judge Forrester sits in the General Court of the European Union in Luxenburg and will be flying over on the morning of the Trials. The Rt Hon Lord Armstrong sits in the Court of Session. We are expecting an audience of some 700 and clients of Chamberlain McBain are warmly invited to attend - just speak to your usual contact for further information. UPDATE: Congratulations to Leith Primary School in Edinburgh who won the Mooting Cup following tough competition with five other teams
We would like to wish all our clients a safe and merry Christmas and we look forward to working with you during the coming year. We will be closing our offices early on 23rd December and 30th December 2016. Our offices will be closed on 26th & 27th December 2016 as well as 2nd & 3rd January 2017, but we will be open in between Christmas and New Year.
The Accountant in Bankruptcy (AiB) has launched a consultation as part of its review of the Bankruptcy and Diligence etc. (Scotland) Act 2007 ("the 2007 Act"). This review will assess, wherever possible, the impact of the diligence measures introduced by the 2007 Act, including those provisions which are not yet in force. You review the consultation paper here. Responses need to be sent in by 30 November 2016
The new Simplified Procedure takes effect in Scotland as from 28th November 2016, replacing the current small claim and summary cause actions. The new portal that would allow claimants to lodge claims online has been delayed until "early 2017". No actual date has been given as of yet. The new case management system instructed to the Scottish Courts recently have seen staff encountering problems that are resulting in delays. Although the next rise in warrant dues (court fees to issue proceedings) was not scheduled to take place until April 2017, the Scottish Government have increased some fees with effect 28th November. All debt actions under £5,000 will see the fee increase from £78 to £100. Recoverable costs for defended actions less than £5,000 are also set to increase and the increase could be substantial, especially for party litigants. For debt actions raised in the Sheriff Court where the principal sum is greater than £5,000, the fee increases from £96 to £120. Needless to say, the courts are seeing a rush of new actions being raised in order to avoid the increase.
Chamberlain McBain continue its work with the School Mock Court Case Project SCIO. The Awards Ceremony for the Seniors section was held in the Signet Library on 3rd November, kindly sponsored by the WS Society, with our Mr Murphy being the Master of Ceremonies. The Eve Crowe Mooting Cup was presented by Lady Dorrian, the Lord Justice Clerk, to the overall winners, Kirkcaldy High School. Joint runners up were Dunbar Grammar and George Watsons College. We would like to thank the pupils from many of the schools who performed to the audience and our very own Miss Sarah Lamb who sang. It was announced during the evening that owing to the success of this project a Seniors project will open to the schools in the West of Scotland as soon as the next academic year.
Bills of sale are a way in which individuals can use goods they already own as security for a loan. They are governed by two Victorian statutes, dating from 1878 and 1882. In September 2014, HM Treasury asked the Law Commission to review the Bills of Sale Acts. Our 2016 report recommends that the Bills of Sale Acts should be repealed and replaced with modern legislation that imposes fewer burdens on lenders and provides more protection for borrowers. A copy of the report can be found here.
Following on from the success of the meeting in May the East of Scotland Branch of the Chartered Institute Credit Management, together with Chamberlain McBain, are organising a visit to Edinburgh Zoo ... to see the Pandas and to hear from three experts in various fields of business. Come and hear from three speakers (Laura Irvine, BTO Solicitors LLP TOPIC: Data Protection - Joanna Cashmore, Bibby Factors Scotland TOPIC: Alternative Funding ... Factoring - Mike Butchart Qdos/Powered by Integra TOPIC: Insurance / Accountancy) Delegates are asked to arrive for 4.45pm for a 5pm sharp start. The event will conclude around at 7pm. A light bite and drink will be provided. This event has been oversubscribed - sorry no more registrations can be accepted.
Chamberlain McBain remain the principal sponsors of this educational initiative. Now spanning four projects - Juniors - West of Scotland, Lothians and Tayside & Fife - Seniors Central Scotland, the project attracts some 2,000 students from some 45 schools. Both the Lothians and Seniors project get underway this month, with the West of Scotland starting in September and Tayside in October. Finals on 27th February 2017. For more details see here
Lord Justice Briggs report is now available which looks at the review in terms of procedure in the civil courts. Details can be found at www.judiciary.gov.uk
The Scottish government has issued a consultation paper in which possible increases of 24 per cent are being discussed in an effort to recover the cost to the public of providing the services of the courts. The consultation sets out proposals for fees in the Court of Session, the High Court of the Justiciary, the Sheriff Appeal Court, the Sheriff Court, the Sheriff Personal Injury Court, and the Justice of the Peace Court. It has been said that court fees are a major source of income for the Scottish Courts and Tribunals Service and it is now apparently necessary to increase fees in order to achieve full cost recovery. The consultation seeks views on two options each of which is aimed at providing full cost recovery. The first is a flat rise – increasing all fees by 24 per cent. The second is targeted increases – increasing fees for only some actions while leaving others untouched. Following the introduction of this consultation the Dean of the Faculty of Advocates, Gordon Jackson QC, has sparked a note of concern about access to justice in light of proposed increases in civil court fees. Mr Jackson said: “The Faculty will consider the paper and respond in detail in due course. My immediate concern would be maintaining access to justice and I would be anxious to ensure that no change would adversely affect that. The Scottish government said the aim of increasing civil court fees was to raise around £5m-£6m per annum which "should ensure full cost recovery." In addition, a new simple procedure is to replace summary cause and small claims procedures and the consultation sets out the proposed fees for this new procedure.
Since the 6th of April 2016 all applications for charging orders or attachment orders must be made to the County Court Money Claims Centre. The Claimant must serve the interim Charging Order within 21 days of the date of the interim order. This is an important change to the previous procedure. Under the old rules claimants were required to serve the interim charging order within 21 days of the hearing. These rules presume the interim order will be made to claimants promptly, something which we will need to wait and see in practice. The idea is that most applications for a Charging Order (where the Defendant does not object) will remain at the County Court Money Claims Centre where the final order will be made without a hearing. If the Debtor does object to the matter it will be transferred to the Debtor’s home court.