Blog

With Britain's economic recovery,  there's the prospect of the fragile growth being thrown off course by the damaging impacts of recent flooding? Mark Carney, The Governor of the Bank of England, warned last week that farming and other businesses hit by floods could have a negative impact on Gross Domestic Product (GDP). In previous periods of bad weather such as heavy snow, this has reduced quarterly GDP by up to 0.2%. However, severe cold is more widespread whereas flooding tends to effect a relatively small area of floodplain and coastline.

Extensive snow makes it almost impossible for construction to take place - since construction accounts for around 7% of economic activity, a wide-scale pause in building works has a much bigger impact than flooding. If there is any possible 'upside' to natural disaster it is that, in purely economic terms, GDP tends to bounce back quite quickly. Japan for example has often experienced devastating earthquakes which produce an immediate hit to GDP as well as immeasurable human cost. However, once the reconstruction of houses, roads, bridges and other infrastructure takes place, the economy receives a tremendous stimulus and recovers quickly.

In the UK it will be the insurance companies who are amongst the first to count the cost of the wettest January on records by comparison, the 2007 floods cost insurers about £3 billion. Some economists have pointed out that repairs to roads and railway lines will probably help support the economic growth not to mention retailers of items like carpets and kitchens in affected areas. There will clearly be some negative statistical impact of this years floods on the UK's fragile economic growth. Although this is no consolation to people who have been severely affected, the flooding is unlikely to derail the recovery and could even provide a modest stimulus over the rest of the year. Richard Bloomfield is the website editor at The Workplace Depot

Update June 2016:

Figures released in January this year by the Association of British Insurers (ABI) predicted that losses caused by flood and storm damage during the winter of 2015 would far exceed those of two years ago resulting from the wettest winter on UK record. Insurance companies were expected to pay out around £1.3 billion for claims following a series of storms, flooding and heavy rainfall during the winter of 2015.The economic losses from the winter 2013-14 have been worked out by the Environment Agency but are yet been published by the Department for Environment, Food and Rural Affairs.

The ABI predicted that insurance claims would cost £1.1 billion, including £446 million for businesses and homes that were affected by heavy flooding. The bill for damages recorded this past winter is expected to exceed the roughly £600 million in losses caused by flooding during 2012, but will be much lower than what was claimed for the summer floods of 2007, which totaled around the £3.2 billion mark. The UK Climate Change Risk Assessment that was published in 2012, estimated that losses from coastal and river flooding in England and Wales could possibly rise from about £1.2 billion per year today to between £1.6 and £6.8 billion by the 2050s.

December 2015 was the wettest December for the UK since 1910 when Met Office records began. Climate change experts say that six of the seven wettest years on record in the UK have all occurred from the year 2000 onward. The UK has also experienced its eight warmest years on record. Climatologists are predicting that climate change is making the UK a warmer and wetter country overall. The UK Climate Change Risk Assessment estimated that about 6 million residential and non-residential properties in the UK are exposed to some level of risk of coastal, river or surface water flooding.

The UK is said to have missed the export targets of doubling the value of its exports to £1 trillion by 2020. The PAC said the UK is not performing as well as its European counterparts, France, Germany and Italy. However a government spokesman stated "real progress" has been made on the increase of exports worldwide. The foreign & commonwealth office (FCO) and the UK Trade and Investment (UKTI) offices spent over £420 trillion on 2013 on promoting exports worldwide. However reports state that the growth did not really increase, remaining 'flat' reported by the BBC. One factor which has been sighted in hampering the UKs export increase are tighter visa restrictions.

This is seen to put potential business travelers off from vesting the UK. This can really have a major effect in building relationships with foreign companies. A spokesperson explained that despite the coming shortfall in the governments, progress is being made. The spokesperson explained: "As part of the government's long term economic plan we have set ourselves an ambitious target to double exports by 2020. We make no apology for setting a stretching target and we are working hard to achieve this."" We are shifting our focus towards targeting high-value opportunities, providing more support and advice for UK small and medium sized businesses.

We are also establishing an overseas business network which will include British Business Centers in key markets across the world including India, China and UAE."" We have made real progress through our increased efforts in some of the growth markets further afield: exports to China, for example, have increased by 91%, and exports to Russia are up by 118%."

Update June 2016

Despite the government's aim of increasing UK exports to £1trn by the year 2020, recent projections are showing that we are still falling short of meeting that goal. However, UK businesses have even more opportunity to export than ever before. As a country with a proud history of trading, the Office for National Statistics (ONS) has revealed that our goods trading deficit did in fact narrow during January this year, despite the gap growing overall as Britain imported more goods into the country. According to Howard Archer, chief UK and European economist at IHS Global Insight, “exports are being hampered by the sterling's overall strength in 2015, particularly against the euro, and moderate global demand."

While there are many reasons that cause figures to fluctuate, exporting still remains a key component of a healthy economy, and those companies who export their goods have been shown to be four times less likely to fold and go bankrupt. Even during times or recession, exporting companies are around ten times less likely to fail than other companies, according to figures released at the Global Trade Review UK trade and export finance conference. The head of UK Trade and Investment (UKTI), Catherine Raines, has urged British companies that export, as well as foreign buyers and business investors to work together to boost exports – namely through Exporting is GREAT, a programme launched by the Government to help UK companies benefit from real-time export opportunities in all sectors, across the world.

Taking part in the programme has offered companies up to 40 new opportunities each day to export - or roughly an opportunity every 37 minutes. The programme links together 109 different countries across 44 business sectors, and export opportunities are not limited to the EU either with chances to trade with other countries such as China and Finland to name but two. The advancements in digital technology has enabled British business to potentially trade with the whole world, so even the smallest of UK companies can have a global reach and a chance to grow new markets. Capital Offices Virtual Office Services in London are great way for foreign companies and business investors looking to setup in the UK without having to outlay expensive overheads which are associated with London office space. Our complete Virtual Office London package is ideal for businesses who are wanting to get ahead and want to impress their clients and associates.

Our virtual office package combines our highly sought after central London business mail forwarding address with a professional and experienced virtual PA telephone answering service. Our team is highly experienced, having been based in City Road since 1971, we understand how businesses operate and have helped many countless clients expand and reach their goals. Why not take a look at the range of comprehensive packages we offer at very reasonable prices.

Individual insolvencies in England and Wales are at an all time low for over eight years. This is according to the latest government report. It is said that bankruptcy rates were the lowest rate since 2005.A reason to why the rate is falling is said to be due to people finding it harder to get credit due to lenders not willing to risk on individuals with lower credit ratings. However this can all change, the Bank of England is expected to raise its interest rate for the first time since 2009 due to the strengthening of the economy.

People will find it hard to repay mortgages due to the hike in interest and this can lead to further difficulty for people who are already stretched financially. So forecasters are expecting insolvency to rise in the near future. An insolvency partner at HW Fisher said: "These are the best insolvency figures we've seen in a while" "But with many of Britain's businesses still just 'hanging on', thousands of our weaker firms are far from out of the woods yet."" Sooner or later, interest rates will rise and bank forbearance will end - and when that happens the weaker firms will be in serious trouble," he added.

Update June 2016:

According to figures released in May this year by the Money Charity, UK personal debt statistics now topped £1.474 TRILLION at the end of March 2016. This rose from £1.434 TRILLION at the end of March 2015, which means an extra average debt of £793.13 per UK adult according to current population figures. The average borrowing per household, including mortgage loans, was calculated to be £54,597 in March, making the average debt per adult £29,190,which is around 111.9 percent of UK average earnings. Consumer credit levels still outstanding was shown to be £182.4 billion at the end of March 2016, up from £171.1 billion at the end of March 2015. This works out at an increase of £198.45 for every adult in UK, making average consumer credit borrowing per UK adult £3,613.Credit card debt in January 2016 accounted for £63.3 billion, an average of £2,381 debt per household held on 'plastic'.

Not good news for for many people with credit card debt who can only afford to pay the minimum rate each month. With average credit card interest rate at current levels, it would take 25 years and 6 months to repay by only making minimum repayments each month. The number of personal insolvencies declared now stands at an average of  222 people a day.  This is equal to one person going bankrupt every 6 minutes and 13 seconds. You can see the full breakdown of these and other figures on the Money Charity site here.

Fears over a property bubble with over inflated prices causing many people to borrow more in order to get on the housing ladder. It is a 6 year high for residential house sales, the highest peak since 2008.The increase can be related to more relaxed credit lending and a more confident consumer. Over Christmas lending was almost double of that in the same period in the previous year. Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market, said Peter Bolton-King director at RICS.

On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas. Mortgage approvals are on the increase, lending is up approximately 15 percent when compared to the same period in the previous year. If you look further into this, this can also be attributed to government schemes aimed to help first time buyers through shared equity schemes.

Update June 2016:

Mortgage lending rates have seen a fall since the rush to beat stamp duty changes announced in the last budget came to an end. There was a spike in mortgage lending during March as the new higher stamp duty rates changes date approached, followed by a sharp drop during April. These changes caused a rush on the housing market as people were trying to snap up available properties before the stamp duty increases came into effect. According to recently released figures from the British Bankers' Association, a total of 78,301 loans were approved during April, which was down almost 5,000 in number from 82,971 mortgages approved during March. Loan values also slumped, falling to £10.9bn in April from £16.1bn in March. While the sharp rise and fall in mortgage approvals can be attributed to the changes in stamp duty, overall mortgage lending is still continuing to rise quickly on an annual basis.

According to the figures there was a 5,000 increase in the number of loans granted in April 2016 when compared to April last year, and the value of those loans was worked out to be 12 percent higher year-on-year. Landlords scrambling to buy up properties before the extra stamp duty rates came into effect meant that banks and building societies issued more loans during March this year than in any other month since November 2007.Chief economists are predicting a brief slowdown of house sales across the housing market over the next few months as a result of the uncertainty over the EU Referendum. However, they expect a renewed rise in sales and house prices next year as the market settles down. Looking for Banking? We can help.  Check out our Barclays Fast Track Banking service! We are proud to provide all of our clients with Barclays fast track banking.

We understand how important it is to keep on top of your business finances, and that is why Capital Office have teamed up with the UK`s leading Bank and Accountancy Practice. Capital Office can help you get a Business Bank Account through our secure banking partner, Barclays. This is a fast track scheme which is available through us to our clients. To find out more, contact us through our banking introduction page and we will be pleased to offer you our assistance.

The trade deficit the UK faces has decreased to £3.2 billion in the November period. This can be directly associated with the higher exports of goods to Europe. The UK exports of products increased by 2% between October and November - the total being £25.3bn. The reason for this increase is mainly due to the increase of trade with the European Union.The main exports which have helped increase the exports to the EU are being attributed to Chemical Export. However the UK has also started to import more from the EU. The current amount imported is at an all-time high of £19.2 billion attributed to European car manufacturers.It`s not all good news; forecasters are predicting long term exports to fall over the coming years. This will result in a widening trade deficit something the government will want to tackle.

Update June 2016:

UK trade deficit falls after record rise in exports

2016 is proving to be a good year for reducing the UK trade deficit according to recently released figures. In fact the volume of goods exported from Britain climbed by a whopping 11.2% in April this year - that is the biggest monthly recorded increase since records began back in 1998.Due to this increase in goods export, the country's trade deficit fell to a lower level than was predicted for April. This is good news too as it has also been revealed that the UK high street, as well as the manufacturing business sector, have both seen healthy figures reported. Business analysts are now saying the the UK economy has steadied since January, despite the announcement of the EU referendum.While the growth in exports from the UK mainly came from other EU countries, there was also a small rise in sales from countries outside of the EU. Compared with last year, UK exports have increased by 10.3% inside Europe, and 1.9% outside of Europe.Despite the rise in exports to the EU, during April alone our exports to the rest of the world saw a rise of £1.3bn to a new record level of £14bn. That is not bad at all when compared with a £900m rise in exports to the EU.According to the figures from the Office for National Statistics, the trade deficit in goods fell to £10.5bn from a downwardly revised £10.6bn in March. Our increased exports to the EU comes after a general rise in economic growth in other member states, and in the face of previously fast growing economies such as South Africa, Russia and Brazil falling into recession.Despite the heightened uncertainty of the European Referendum, the figures give a lot of hope to exporters and the rise in industrial production in April, along with good retail sales growth, has certainly helped them to achieve decent levels of export rates.

The BCC Has stated the UK economy to grow in the next year. The following was posted here in January 2015:The British Chambers of Commerce (BCC) is stating the UK`s economy is set to strengthen in the coming year. Looking at important indicators coming from over 8,000 businesses it shows that the factors are higher than the crisis in 2007. Specifically manufacturing sectors, showing orders and employment are at all time highs. John Longworth, director general of the BCC said: "It is a fantastic to start the New Year with a very positive quarterly survey. Firms across the board believe they can create jobs, invest, and export." It is especially pleasing that the spurt in manufacturing has proven not to be a fluke. But businesses have major ambitions, and to be able to meet them, more support must be provided," he said. The findings predict the UK economy to grow by 0.9% in the fourth quarter. The BCC has also said that they expert higher full-year growth in 2014.This is excellent news for UK business and shows the conservative recovery might just be working after all.

Updated June 2016:

The UK economy is predicted to continue to grow strongly during 2016 despite the global slowdown, according to a recent report by EY. With the continued growth in house prices, increasing demand for exports from the UK and a rise in the average household budget, financiers are now predicting this will boost Britain's economy and UK businesses further during the remaining months of 2016, according to research published earlier this year. Top London economists estimate that Britain's economy will grow by an average of 2.6% this year, compared with just 2.2% during 2015, despite a disappointing start to the year from global markets. With the rise in the new national living wage to £7.20 per hour, householders have an increased disposable income, and with a combination of low interest rates and low inflation, economists are seeing a boost in consumer spending resulting in a forecast growth of 2.8% over last year. The report by EY also predicted that house prices would rise by an average of 6.5% this year, but on the downside the levels of new house building is still set to fall short of what is needed to satisfy demand.

In a separate survey conducted by the Confederation of British Industry and accountancy firm PwC, showed nearly 50% of financial services companies reporting an increase in their business in the latter quarter of 2015 and into early 2016, with activity expected to continue to increase over the rest of this year, according to 30% of companies surveyed. It is clear that London remains to be one of the most desirable cities in the world to conduct business. Even if you don't have a London address for your own business, you can still benefit from the prestige of having your office listed here. Take a look at our Virtual Office Packages to see how our services can help you build credibility and good standing for your business.

London`s property prices are set to rise further more as London has been voted the worlds top city for investment in property by foreign investors. The investment from outside the UK is causing a housing bubble which could push out first time buyers. Being voted the best city does carry problems for the native home owners. The rise of prices on London property is happening at an unsustainable rate and is squeezing the average person out of the city. The conservative government are fully aware of the issue and have announced that as of the their will be a capital gains tax on foreign investors to help try and curb the soaring property prices. The house prices in London rose by nearly 9% in August alone, compared with around 2% elsewhere in the UK, according to the Office for National Statistics. Read more on Capital Office Virtual Office London services.

Update: June 2016

London is still ranking high on the list for business investments - both from home and abroad! In fact in a recent report earlier this year from EY's annual Attractiveness Survey revealed that London has overtaken New York and Shanghai in a global ranking of top tech cities, thanks to its "incredible entrepreneurial attitude". The report goes on to predict that London is the second most likely place to create the 'next big tech giant', only one place behind San Francisco. This means that compared to last year, London has jumped from fourth place to second place in the rankings - something that was hardly imaginable just five years ago. London has always been a world hub for Financial Services, and these will always remain as important to the Capital, but other businesses such as the tech industry and business services are now booming, making London a very attractive place to the rest of the world's investors.

The strength of London that has made it the financial capital of the world will also help the city as well as the whole country grow and prosper further over the coming years. Britain is a world leader with a prosperous future, and we have an environment that is well suited to entrepreneurs and business investors from across the world in all sectors of industry. The survey conducted by EY shows that 2015 was a record year for foreign investment into the UK and especially London. In fact during 2015,  London secured 406 foreign direct investments (FDI) projects – up seven per cent on 2014 – which created an estimated 7,026 new jobs.

With London now outperforming all other European cities, nearly 60% of business investors surveyed cited London as one of their top three cities for foreign direct investment, beating Paris into second place. With all the world movers and shakers enjoying the prestige associated with having a London based business, we feel that you shouldn't have to miss out on having a high quality London address for your business. Why not check out our great value for money London Address Services here to find out for yourself how you can benefit from having a London Registered Address.

The power of a white room is stunning—clean and crisp, the neutral palette adds a dose of instant chic to any home. With a never-ending array of undertones and finishes, finding the perfect white paint colours for your space can be a daunting task.So what's the perfect formulation for your molding? Your bathroom? How about your ceiling? We've asked designer Rozanne Jackson to break it down. Here, she discusses her favorite shades of ivory for every space:1. Sherwin Williams - SW551: Greek Villa. This is my favorite soft white, it looks beautiful in any light. I have used this both at projects on the coast, and in the hills of Tennessee. It neither reads pink nor yellow, but stays true soft white.2. Zolatone - the Counterpoint Collection. Several varying shades of white, all pearlized. An awesome set of paint options to glamorize cabinetry for bathroom vanities and closets. Subtle, but elegant.

Updating a historic home can come with challenges (like hidden surprises behind every demolished wall). So we can only imagine the effort required to convert an old space that was never actually meant to be a cozy home. Luckily, the couple that now lives in this 1896 church had one convenient advantage they're architects who had always dreamed of taking on such a project. A year of construction aimed to preserve as much of the church as possible (like the impressive windows and iconic steeple), but prepare the space for modern life. The result is a one-of-a-kind home with luxurious vaulted ceilings, creative outdoor patios, and an open living space big enough to entertain, well, a church congregation (or one busybody houseguest).

Self Assessment, Are You Ready?

The online filing date for self assessments is 31st January, so make sure you have everything filed to avoid late filing penalties! If you need help or advice with working out your finances and filling out your return, get in contact with us today. Our team of experienced accountants can help advise you on what is needed and how much it will cost. As the deadline for self-assessment tax returns fast approaches each year, HM Revenue & Customs (HMRC) are geared up and waiting for the deluge of millions of documents to come flooding into their offices and digital submissions to hit their accounts. Remember that if self assessment tax returns are not in by 31 January, millions of people will face a £100 fine if they do not get their forms in before the midnight deadline.

Don't be one of them! However, don't panic if you are one of those people who tends to procrastinate over their self-assessment submissions and always leaves it until the last minute. We are here to help take the stress out of the process for you, so whether you are simply too busy with your business to spare the time to complete your assessment, or you find the whole process confusing, we can help. Just give us a call on 0207 566 3939 to chat to one of our friendly team members, or alternatively fill out our contact form here, and one of our advisors will get back to you very quickly. It is better to be safe than sorry, and although it is a very British trait to leave things until the last minute, getting your self-assessment submitted in plenty of time can really take the weight off your shoulders.

Did you know that figures from HMRC shows a massive 569,847 self-assessment tax returns came in on the deadline date in 2014?I don't know about you, but I don't want to cause myself any undue stress by leaving it so late just in case something happens at the last minute that may prevent me submitting on time. What if you fall ill or your internet goes down? Yes, there may be lots of genuine reasons for not meeting the deadline date, but most are preventable by submitting self-assessment returns in plenty of time instead of risking it by leaving it so close to the deadline. Here are some prime examples submitted to HMRC of excuses given for missing the 31st January deadline: (Taken from the HMRC website).

1.) My pet dog ate my tax return... and all the reminders.

2.) I was up a mountain in Wales and could not find a postbox or get an internet signal.

3.) I fell in with the wrong crowd.

4.) I have been travelling the world, trying to escape from a foreign intelligence agency.

5.) Barack Obama is in charge of my finances.

These are pretty poor excuses to use and I am sure each person using these were landed with a £100 penalty for late delivery. Why leave it to chance? Let us help you to get your self-assessment filed away and off your mind. Contact us today.