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Wednesday, 28 May 2008

Compliance with HMRC rules

Today we launch a new and very important page on

Compliance with tax and VAT

HM Revenue & Customs and compliance is a fundamental issue for all of us and HMRC are very keen to improve tax rule compliance in SME businesses. If your business does comply with all of the myriad rules and regulations you don't need to read this guide. If you are not sure that your business IS compliant have a look at our guide page today!

CVA's rejected because of poor compliance.

We have had two CVA's rejected recently, not because they were poorly written of course(!), nor because they offered very low dividends. Actually they both offered high dividends in 3 years but both were rejected by HMRC because the directors had not complied with the tax rules prior to the business' insolvency.

One had failed to submit 3 VAT returns and another had failed to register for VAT and file VAT returns some 18 months before becoming insolvent. Despite bringing those issues up to date the companies in question both had PAYE and P11D compliance issues allied to previous insolvencies of the directors.

So be warned get your compliance looked at!

Thursday, 22 May 2008

The most common complaint we hear - Accountants don't help my company!

Now we all need accountants, and because I am on a train with my auditor I would just like to start by saying we have a good working relationship with Greaves West & Ayre !

Our turnaround and insolvency advisors hear many things when talking to new clients but the most common complaint we hear is: "my accountants are useless, we have been asking for management accounts for months", we don't know if we are making or losing money"!.

Whilst it is hardly fair to blame everyone else when things go wrong we DO have some sympathy with these views. Often accountants will counter the cry by complaining the client does not provide information on time. So there are faults on both sides

The real problem is management of expectation. Accountants should not claim they will produce monthly management information (MI) if that is not what they re set up to deliver. If they simply produce annual accounts and tax returns, then all well and good, but don't sell the monthly service if you cannot deliver, this creates ill feeling and is poor marketing for your practice.

Likewise directors should not assume, they should specify precisely what they want to be provided with and sign an agreement to deliver their side of the bargain.

Well the fact is this is not an ideal world and we still get daily complaints and requests for help. We are not set up to deliver this service, we do turnaround!

So the really good news is we have teamed up with The FD Centre to provide a high quality service, ranging from monthly management information provision to acting as a finance director for your business. FDC has 45 accountants with a business background right across the UK.

Additionally we have a long term relationship with The Outsourced Finance Department and Insight Associates
who can handle all aspects of bookkeeping through to acting as an FD and "interpreter" for the entrepreneurs amongst you who want plain English accounting help.

We are very pleased with these relationships because we often rescue companies only to see them fail when the financial reporting fails. With good MI the problems will be spotted sooner and then the board can act sooner.

Banks and investors NEED quality MI to continue to support companies through these uncertain times, so if you are having problems with MI please consider getting proper advice.

I strongly recommend both our esteemed colleagues. If YOU NEED good quality financial information get in touch with me.

Wednesday, 21 May 2008

Are we looking down the barrel?

We get lots of email or news feeds into our inbox saying this bank has written a squillion $/£ off here and another two squillion $/£ off there. Yet most people we speak to out here in the real world of small to medium sized business are not seeing the banks taking aggressive action against their borrowing facilities or calling in loans. Ok they're not generally allowing new borrowing increases in the main but they are supporting the SME business person.

At this stage its the Crown agencies that seem to be upping the ante to improve their debt collection. Perhaps the Government is short of money? Perhaps the tax man sees a sharp rise in payment defaults? Perhaps people are spreading the cashflow pain to their creditors because banks are not allowing any borrowing increases?

Whatever the answer its apparent that HMRC will be chasing harder still in the next 12 months.

CompanyRescue - Miracle workers?

Let's just call this guy Mr X, he called our helpline and asked the following questions:

"My company is viable but we have had a winding up petition from the VAT man, I have read that you can protect my company and stop the peitition is that right"?

After replying that we have done this many times before and will try for him we asked when was the petition issued and when is the petition hearing?

He replied "Oh, the hearing is today I am outside the High Court now"!

Not a company we would want to help!

Got to admire him for trying but really he should have been acting a LITTLE sooner than the day of the hearing.

Tuesday, 20 May 2008

Companies Cannot Do it Alone

We start off with a something free for our readers today! Many advisors or bankers are not aware of the company voluntary arrangement tool that we specialise in. Click here for A detailed report into UK Management Attitudes to Company Voluntary Arrangements. This report into the CVA tool was published by the Centre for the Study of Financial Innovation which is a non-profit think-tank, established in 1993, to look at future developments in the international financial field - particularly from the point of view of practitioners.
We see a growing demand for rescue and restructuring options for struggling companies and this report highlights why the company voluntary arrangement has not grown as fast as the government would have liked. Having been introduced in 1986 and being around for 22 years now it is still under-utlised. In this current climate we believe a CVA is a very powerful tool for distressed by fundamentally viable businesses. it can be used to remove costs, people, buildings, onerous leases and enable a powerful restructure of the business.

HMRC and Cashflow Deals

Time to Pay ProgrammeAll of our enquiries are stating that they are behind with PAYE and VAT! This would suggest that thousands of business people are juggling cash everyday: Do they pay the salaries? pay the VAT? pay the supplier? These huge decisions are made many times a day in the SME sector and its vital that people act properly. Most are not aware that HMRC will accept well structured and reasonable proposals for spreading tax payments. We have seen growing demand for our Time to Pay Programmes, specially designed by KSA to provide high quality letters, board resolutions and step by step guides to asking for and getting several months to pay tax debts. This lifeline IS available but HMRC will want a formal request backed up by proper information.

If you are an advisor to companies or partnerships experiencing cashflow crises it could be a very useful tool for your practice. if you are a struggling business get your Experts Time to Pay Programme here

Crisis what Crisis?

In the current "credit crunch" environment is easy to say that everyone in retail or property market is suffering but, thats not just what we are witnessing. Currently, we ARE working with retailers and estate agents BUT we are also working with the following clients:

  • Printing and print finishing

  • Automotive consultancy

  • Bio fuels company

  • Publishing

  • Software companies (2)

  • Computer hardware and software (large business clients)

  • Community Interest Company (enabling unemployed to return to work)

  • Building and Bricklaying companies (3)

  • Sandwich manufacturer

  • Accountancy practice for pubs

  • Motor dealers and service (2)

  • Water coolers and distributors

  • Recruitment company

  • Electrical & Mechanical Service Solutions

  • TV post production

  • Window and conservatory manufacturing

  • Retail/distribution hobbies and models

Right now KSA is advising 25 live company voluntary arrangement (CVA) clients, an all time record for us and we are seeing pain across many sectors. I suppose that if you analyse the list above they do have a common theme. They do tend to be consumer / customer facing and this, I fear, is a sign of things to come in the UK over the next 18 month. Rising food and fuel prices, higher taxes, rising mortgage costs all against a backdrop of modestly rising incomes, means a tightening of the consumer purse.

Will the froth be blown off the economy and growth slow to under 1.5%, or will we see a recession? Its too early to say but growth is slowing rapidly and we are seeing a commensurate rise in demand for CVA's. Want a quick idea of how a CVA works? Click here for our FREE unique CVA flowchart

New Team Member Joins KSA

We are pleased to announce a new member of staff has joined KSA as receptionist and assistant to the KSA case administrators. Carol Day joined KSA in early April and has settled in well in this hectic time. Despite a long drawn out Easter we have seen sharp increase in enquiries for rescue and restructuring work. So its fair to say Carol has been pushed straight into the deep end!

Top 20 Cost Saving Tips from KSA

Finally in tough times the tough get going.... if cashflow is a problem then why not use our top 20 cost saving tips. All free simply click here....KSA's top 20 Cost Saving Tips

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