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Businesses face further tough times ahead
As the financial and business communities this morning digested Chancellor Alistair Darling’s Pre-Budget Report, Liverpool commentators were predicting little benefit for businesses. “I’m disappointed that there are extra costs in the pipeline for both employers and employees, with the planned increase of national insurance contributions by 0.5 per cent in 2011,” said Jane Jackson, tax partner with PKF in Liverpool. “This is a significant increase in costs that small businesses could have done without. It will be adding extra financial burdens at a time when businesses will need all the help they can receive to get back on their feet.” Overall the package of support for small businesses was seen as good news, particularly the ability to spread business tax payments across a longer period of time and the freeze on corporation tax. But Dave Golding, North West spokesman for Liverpool-headquartered Bibby Financial Services, said: “With increasing numbers of small business owners and managers struggling to overcome cash flow concerns, it is disappointing that it has had to take a global economic crisis for measures to support their stability and growth to be put in place. While businesses will welcome the short-term measures, it remains to be seen whether this consideration for small business’ needs will be extended into the long term. ”
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Deals
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Furnishing the deal
Knowsley-based furniture designer and manufacturer Wilson Duffy has received a cash boost from Alliance Fund Managers (AFM) through its Merseyside Special Investment Fund Small Firms Fund that will allow the business, which began trading in June, to move to the next level. The company, run by directors Ian Wilson and Mark Duffy who have more than 50 years’ combined experience in the furniture making industry, provides a bespoke, handcrafted service to customers throughout the North West including design, manufacture, painting and fitting of kitchen, bathroom, lounge and bedroom furniture. It is in talks with a top Liverpool hotel to fit out the bedrooms. The funding package totalled about £47,000, which includes a £20,000 loan from AFM, directors’ own investment and a Start-Up Grant from Knowsley Council. 
What is an MBI?
With more and more businesses facing distressed turnaround situations, this month Insider’s online Deals Advice section brings you a new feature to explain management buy-ins (MBIs), a rare sight in the deals market that could, say advisers, become more prevalent as funders call for skills input at management level. “The real value for MBI teams is going to be in buying businesses shortly before or in an insolvency process because they’ll be paying very little for goodwill but getting a slimmed-down business,” says John Green, chief executive of accountancy and business advisory firm Pierce in Blackburn. To read more, visit our Deals Advice section and click on What is… an MBI?
JD takes JJB stake
Bury-based sports retailer JD Sports Fashion has taken a stake in North West rival JJB Sports by purchasing 25,058,100 shares at of 32.25 pence per share, giving it just over 10 per cent of the issued voting ordinary share capital of JJB. Described as a “strategic investment”, the deal marks Wigan-based JJB’s important position in the performance sports retail market, Meanwhile, JJB has received a bid from a potential buyer for its Fitness Clubs business, widely reported to be former JJB owner Dave Whelan.
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Business
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The burden of VAT cuts
Chancellor Alistair Darling’s much-leaked plans to cut VAT by 2.5 per cent have been widely derided for their minimal impact on prices for consumers. Professional advisers in Liverpool were sceptical, but still expect retailers to pass on the cuts. Andrew Noon, a partner at the Liverpool office of DLA Piper, said: “Whether or not the savings find their way into the consumer's pocket, and whether, once there, they find their way out, remains to be seen. As with the banks holding firm on mortgage rates, so too is there a risk that retailers maintain prices and pocket the VAT saving, although such is the level of competition on the high street at the moment, I can’t see many retailers holding out too long before passing on the benefit.”
Port rates plans amended
Chancellor Alistair Darling yesterday announced an amendment to the government’s plans to separately assess port-based businesses for business rates and retroactively charge rates back to April 2005, plans much criticised by port cities such as Liverpool. The government will legislate to give businesses more time to pay certain backdated business rates bills issued before 31 March 2010, and businesses will be able to pay their liability for previous years in equal interest-free instalments over eight years, rather than immediately. Phil Rees-Roberts, a Liverpool solicitor campaigning against the tax on behalf of a number of local dock-based businesses, said: “The measures suggested in the Pre-Budget Report will do nothing to remove the basic problem. It doesn’t matter how long people have to pay – the fact the tax now exists throws a fundamental question over the future of any business operating on this model.”
Thompson joins events company
Former Liverpool FC defender Phil Thompson has joined Liverpool-based corporate hospitality and events company NW Corporate as an ambassador. Thompson, now a regular football pundit on Sky Sports, will work to promote the business to a national audience. Established in June 2007, NW Corporate has experienced rapid growth and has expanded its operations to cover a wider range of sporting events.
New faces on NWDA board
Three new appointments have been made to the board of the Northwest Regional Developments Agency. Anne Selby, chief executive of The Wildlife Trust for Lancashire, Manchester and Merseyside, Association of Greater Manchester Authorities chairman Lord Peter Smith and AstraZeneca’s vice-president of UK science affairs John Stageman will all take up their three-year appointments on 14 December. Meanwhile, Brenda Smith’s appointment has been extended for one year until 13 December 2009.
Award wins for Warrington bus company
Warrington Borough Transport has scooped two accolades at the UK Bus Awards 2008, including the overall title of Bus Operator of the Year. The company beat off competition from ten other shortlisted bus operators to win the highest award of the night, while it was also named Shire Operator of the Year.
Football awards net events title
The Northwest Football Awards, which took place at the Midland Hotel in Manchester last week, has been named the Best New Event at the Eventia UK Awards 2008. The event was praised for its creativity, client endorsement and wow factor. Marcie Incarico, founder and chief executive of organiser Out There, said: “The concentration of football within the North West and its contributions to the regional economy and community should be recognised, and we are very pleased to be the agency doing just that.”
£2m skills fund launched
A £2m fund has been launched in Cheshire and Warrington to help businesses access skills development and training in areas where there is no public funding. The fund, which will be administered by Cheshire & Warrington Economic Alliance on behalf of Cheshire Employer and Skills Development, will aim to improve the sharing of good practice and to encourage companies to think about their long-term staffing needs.
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Property
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Changes not enough, says industry
The changes to empty rates legislation in the Pre-Budget Report don’t go far enough, say professionals. There will be a one-year lifting of rates liability from April 2009 for buildings with a rateable value of less than £15,000. But Mark Radford, head of Jones Lang LaSalle’s regional rating team, said: “The government has listened to the property sector and reduced this unfair burden, but the changes do not go far enough. The changes will help most small businesses but not regeneration or redevelopment schemes.” David Cownie, a director at CB Richard Ellis, said: “The government’s attempts have fallen well short of the level of relief the property sector was hoping for.”
Are you claiming enough?
Accountancy PKF is today hosting a Surviving the Market seminar at Haydock racecourse designed to offer advice to the real estate and construction sectors on strategies in the downturn. Partner Jane Jackson told Insider: “What we’re trying to do is show that while for many it’s a crisis, for others it’s an opportunity and there are things businesses can do. It’s an opportunity for people to assess their tax strategies and see what forms of relief are available – people often don’t claim enough, because they don’t see it as worth bothering with."
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