Global economic turmoil damaging business confidence

The level of business confidence across the UK has fallen to its lowest level since the UK was still in recession, according to a national study published today.

The joint survey, by an accountancy firm and the Institute of Chartered Accountants in England and Wales (ICAEW), shows a widespread decline in confidence as global economic turmoil has impacted businesses’ future plans.

The UK Business Confidence Monitor (BCM) also shows that an increasing number of businesses see tax and red tape as major challenges, with 40% believing regulation is a greater burden than 12 months ago.

The monitor takes a measure of confidence among business owners and this index has fallen from to +8.1 in the third quarter of 2011, from +13.7 in the second quarter, and is now at its lowest level since the second half of 2009, when the UK was still in recession.

The confidence index has been on a downward trend since the first half of 2010.

Business owners who took part in the survey bemoaned the lack of progress to make it easier to do business in the UK.

Four in 10 firms, told the survey that regulatory requirements now pose a greater challenge than 12 months ago, up from 33% in the same quarter last year.

Despite the introduction of a one in, one out rule, for business regulation and a cut in corporation tax from 28% to 26% in April, many British firms still feel swamped under bureaucracy and red tape.

The BCM also brought to light that many firms are seeing turnover and profit growth weakening, forcing them to revise down future expectations.

This follows expectations that the Office for Budget Responsibility will revise down its own growth forecast of 1.7% for the current year in its forthcoming autumn statement

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Overall, the survey showed that a positive trend in financial performance for many businesses has started to falter.

Average turnover growth for businesses who took part in the survey, for the 12 months to the third quarter of 2011, stands at 3.6%, while average gross profit growth is reported at 3.1%.

Insolvency News reveal the Shortlist for the Fourth Annual Insolvency & Rescue Awards

A record number of entries were submitted and the judges will soon be deciding the winners for the profession's most prestigious awards scheme.

The awards will be held at the Lancaster London hotel on October 5th, which will feature Edward Davey, the minister with responsibility for insolvency, as keynote speaker.

Beer & Young are once again finalists in two categories, they will be defending their title as ‘Business Rescue Funder of the Year – Broker / Equity’ and are also contenders for ‘Business Rescue of the Year - sub £20m turnover.’

HMRC to suppress time to pay statistics

HMRC has confirmed that July’s statistics on time to pay, which reveal that £1.02bn of taxpayers’ money remains outstanding under the scheme, will be the last to be published.

The most recent figures on time to pay, provided by HMRC’s business payment support service, show that £7.71bn in total has been deferred by businesses with cash flow problems, although £6.69bn has been repaid.

The figures show that a total of 444,000 time to pay agreements have been made since November 2008, although the number of deferrals have been in decline since late 2009.

Just over £1bn remains outstanding, of which around £650m is overdue, but the insolvency profession and the public will be left in the dark over these levels after HMRC decided not to publish them in future.

The revenue ran a six-week consultation on the figures earlier this year, but only had two responses, one internally and another from the Treasury. After it closed, HMRC decided that it will stop publishing the statistics after July.

No press release was issued as HMRC did not view it as “high profile” enough, and none of the RPBs or the trade body R3 was made aware of the consultation. 

R3 president Frances Coulson said: “Time to pay has played a vital role in preventing the spike in corporate insolvency numbers that usually follow the end of a recession, and we are concerned to learn that HMRC will no longer publish the official statistics on this from July. We believe they are in the public interest.”

A spokesperson for the Insolvency Practitioners Association said: “It does seem that the IPA was not approached about this consultation. It is a little surprising that the HMRC representatives that spoke about time to pay at the IPA conference in April 2011 also did not mention it.”

A spokesperson for the Institute of Chartered Accountants in Scotland (ICAS) said: “ICAS was not aware of the consultation and we are in agreement that the stats would be useful for the industry.”

A spokesman for HMRC said: “Time to Pay should be a short term aid to businesses. Repeated requests may be a sign that the business is no longer viable. It is not fair if HMRC give preferential treatment to some businesses by giving them easier terms.

“Therefore, given that a repeat request is more likely to be refused it is entirely understandable that the number of refusals is increasing as a percentage of requests made.”