Rescue & Support

Whether you have arrears for VAT, PAYE, National Insurance or Corporation Tax, the most important thing you can do is keep your communication channels open with HMRC.

You need a plan – and you may prefer to have someone represent you and deal on your behalf. HMRC will not take immediate action if you have arranged to start paying what you owe.
This is what’s known as a Time to Pay (TTP) arrangement. The payment plan agreed is one that you can comfortably meet – and that removes as much stress from you as possible.

Before agreeing with HMRC on an action plan for your tax arrears it is critical that you make sure you have negotiated the best solution for you. This is where we can help.

Our partners have vast experience and will ensure that tax disputes are resolved in a way that removes the immediate stress facing your business.
In order to explore all your options, a personal service is made available. With support offered nationwide whether by phone or in person, there’s never any obligation or charge for your initial conversation.
Once we fully understand your situation our partners will suggest a personalised plan of action – and can even negotiate a suitable arrangement on your behalf.

Are your creditors threatening to serve a winding up petition – if so, how should you respond?

A winding up petition is not the end of the line for your business – it’s how you deal with it that will decide this.

Finding the best course of action depends on gaining a clear understanding of all of the strains that your business is facing.

Our team of business consultants can help you calmly explore your options. But first, we must understand your situation.

Serving a winding up petition is the most serious legal action a creditor can take. If you do nothing about it, then a chain of events begins that could disable your ability to trade and, ultimately, end your business.

You must act quickly.

Once the petition is served you only have seven days before your financial situation becomes public knowledge.

Soon the courts will decide whether to grant a winding up order.

And shortly after the liquidation process could begin.

As important as it is to act quickly it is also essential that you act wisely. Call us and our licensed insolvency partners are on hand to guide you every step of the way.

They will make sure you understand all of the implications and together they will do everything possible to prevent the liquidation of your company by rescuing your business.

Directors loan account tax legislation is something you really do need to know about.

The cost and repayment processes for directors loan accounts can be bewilderingly complex. Whereas taking money from a sole trader or partnership business carries only straightforward tax implications, withdrawing money from a company can open up a complicated financial and legal can of worms.

If you cannot afford to repay or offset an overdrawn directors loan account within nine months of your companys year-end you must act quickly to avoid losing control of your business.

We can organise for you to be guided through this step by step – and the earlier you address your situation the more options you have.

If your limited company is insolvent, it can use a Company Voluntary Arrangement (CVA) to pay creditors over a fixed period. If creditors agree, your limited company can continue trading.

A CVA is for companies experiencing cashflow difficulties or have bad debts which they are struggling to recover.

A CVA is a legally binding agreement with your companys creditors to allow a proportion of its debts to be paid back over time.

The company (Director) will provide a cashflow forecast and business plan in a formal proposal to the creditor.

In essence an agreement of what your company can be paid back and over what period of time. The creditors can request amendments that the directors would need to agree. For a CVA to be implemented 75% of the creditors (by value) will have to agree with the proposal.

The proposal will detail how much creditors should expect to receive and whether this will be a full or partial payment.

Supervised by your insolvency partner the agreed regular payments would be made to a designated client account.

A CVA is designed to allow the directors to stay in control and for a company that is viable going forward but is burdened by historic debt.

If your company is insolvent, and you want to limit your liability – liquidation could be the simple option.

You can assess whether your business is insolvent by applying two simple tests.

The balance sheet test: If your companys liabilities exceed the value of its assets it is considered insolvent.

The commercial test: If your business can no longer meet its liabilities when they fall due it is considered insolvent.

As soon as your business fails one of these tests you should seek reliable advice immediately and put together a rescue plan.

We can help you.

Failing these tests is a warning shot across the bow rather than the end of the game. We will, with the help of our partners, explore the best actions to avoid the situation deteriorating and personal liability claims being raised against you. A strategic plan and support can help you place everything back on a secure, solvent footing.

Improve the financial and operational health of your business.

Can restructuring save my business? We have helped businesses stand proud when extreme financial and operational strains have brought them to their knees. You can successfully restructure your business.

Working together we can reduce the crushing stresses you face and create conditions that allow you to deliver positive, long-term changes.

It will not be easy.

Restructuring is not cosmetic change: your business will never be the same.

But it can survive.

There is no ‘magic touch’.

Restructuring involves a complicated series of tough decisions based on hard-won insight and expert know-how. We can help you understand every implication and take each difficult step. Our partners are accredited by every major industry body and offer unparalleled strength with nationwide support available.

We’re here for you whenever and wherever you need us. Together we can find a solution.

A moratorium is a piece of legislation that gives struggling businesses a formal breathing space to pursue a rescue plan. During the moratorium, no legal action can be taken against a company without leave of the court.

Initially, a moratorium lasts for 20 working days. This bill gives you that little bit of breathing space to source finance for injection into the business. It is overseen by an IP (Insolvency Practitioner) and lifted once the rescue plan is in place and funds are available. Our partners can assist you in setting a moratorium up if that is what is needed.

It is often possible to avoid the formal measures of administration or receivership if you act on cash flow or debt issues sooner rather than later. Often demonstrating that you have initiated a restructure to rescue your business can buy you the time you need from your creditors.

Similarly, your best option may be to voluntarily enter into administration to protect your business from aggressive creditor actions. Even when administration is forced upon your business, our expert insolvency practitioners can help you secure the best outcome possible.

To help you understand how, here is an overview of the formal processes that insolvent companies may have to follow:

Company administration is when an insolvency practitioner is appointed to act as the administrator of your company with the goal of bringing about a recovery.

Administration can protect your company from aggressive creditors using legal measures to put it out of business through liquidation and dissolution.

In order for administration to deliver the best outcomes, your company will need to have significant assets or value and reasonably predictable cash flow and profitability.

• If this is not the case then a creditors’ voluntary liquidation (CVL) may well be a more suitable solution.
• If creditors have not yet threatened legal action, but you’re concerned that they could soon, then you may want to explore the security offered by a company voluntary arrangement (CVA) rather than the more prescriptive process of administration.

 

What is a pre-pack administration?

Pre-pack administration allows for the purchase of your companys assets to better preserve asset values, save jobs and maintain commercial momentum through continued customer service and supplier contracts.

Essentially, the old limited company is closed down and its business assets are sold to a new company, usually referred to as a newco, under whom trade can continue free from the stress of debts and creditor pressure.

Strict rules govern this process and your administrator must convince creditors that this action is in their – as well as your – interests.

What are the advantages and disadvantages of administration?

• Any legal actions being taken by creditors are effectively frozen: compulsory liquidation is no longer a threat during administration.
• The financial position you are in with creditors will likewise not worsen.
• The company is placed in the hands of a licensed insolvency practitioner who acts for the interest of your company as well as its creditors.
• Your administrator is given time to create a viable plan for the business and for its repayments to creditors. At any point they can propose a company voluntary arrangement (CVA).
• If a pre-pack administration is arranged then the continuity of the business itself can be secured.
• During the administration you and other directors are no longer in control of the company.
• The administration of your company will be publicly known.
• It is possible that one of your creditors will petition to appoint their own administrator.
• The high costs associated with administration will usually demand a strong and regular cash flow.

If a pre-pack administration is chosen, Transfer of Undertakings (Protection of Employment), or TUPE, regulations will apply. This means transferring all employee contracts and responsibility for meeting salaries over to the newco.

Receivership

Receivership is increasingly less prevalent: it is only open as a recourse to creditors with whom you hold a debenture that was created before 15 September 2003 (i.e. nearly 20 years ago).

Administrative receivership is a formal insolvency proceeding in which a creditor appoints a receiver to assume control of your company.

Unlike administration, your interests and wishes are not considered – the main goal here is to sell any available assets to recoup the debt owed.

Thankfully in the steps needed to be taken before a receiver is appointed there are plenty of opportunities to demonstrate that your business can resolve this situation through other ways.

As ever you have the best chances and most options if you contact an insolvency practitioner sooner rather than later. If you’ve already breached the terms of a secured debenture that contains a fixed or floating charge contact us now to explore your option of setting up a company voluntary arrangement (CVA) or initiating other informal negotiations.