Archial Architects and 1st Dental laboratories recently went into administration having had problems paying HMRC. Both companies were quoted on the AIM market and these two cases have shown that HMRC is getting tough on businesses that have arrears of tax.
The FT reported today that HMRC says there has been no change in its policy or criteria when offering companies time to pay. However, the paper carries a quote from HMRC saying that it takes “a dim view of debtors who reach agreement with us to pay their tax debts over an extended period and then fail to comply. In such cases they should expect HMRC to take firm action to recover the debt.”
At KSA Group we have had a number of companies contact us in September that have had problems with keeping up payments on a Time to Pay Deal.
We have been able to help a print finishing business in the Midlands that owes £160,000 to HMRC. A pre-pack administration was discussed by the board but a CVA is now the preferred route. A Scottish construction company with debts of £300,000 to tax man and the trade, this is a CVA. A South East based recruitment company, owed £60,000 to PAYE and VAT, again a CVA is now being proposed.
All of these business and many more that we have taken under our wing in September have one thing in common. Their TTP deal was not affordable, after bad cashflow payments were delayed under the deal and HMRC withdrew the TTP deal. Then the HMRC Enforcement and Insolvency Department issued 7 day warning letters for winding up petitions to all of them.
If you foresee any problems paying HMRC on a Time to Pay Scheme then you must ACT. If the HMRC issue a seven day letter or a winding up petition as a way of getting their money owed then your options are limited. Your bank account will be frozen once the bank knows a winding up petition has been served. Prior to a winding up petition you can enter into a CVA which HMRC will generally support. Talk to us to or visit our pages on CVAs
Thursday, 30 September 2010
Firms better at managing cashflow
Begbies Traynor have weathered the recession more than most. Initially they benefitted from the increase in insolvencies following the credit crunch in 2009. However, this year many firms have avoided insolvency as a result of a number of factors. There has been less creditor pressure than anticipated, more support from HMRC time to pay scheme, and low interest rates. Consequently, Begbies Traynor have announced that insolvency activity is down and their shares fell yesterday by 7.7%
But lets give credit where it is due. Many firms are now much better at managing cashflow than they were in the last recession. Reasons below;
Better IT systems and reporting.
Cashflow is now a higher priority for senior management.
Employees have been embracing part-time working and wage cuts!
However, if you need to manage cashflow more effectively then you should think about a daily cashflow system. We have some spreadsheets that can help. Alternatively you could utilise the services of a good book keeping service like
The local bookkeeper
The FD centre
Insight Associates
But lets give credit where it is due. Many firms are now much better at managing cashflow than they were in the last recession. Reasons below;
Better IT systems and reporting.
Cashflow is now a higher priority for senior management.
Employees have been embracing part-time working and wage cuts!
However, if you need to manage cashflow more effectively then you should think about a daily cashflow system. We have some spreadsheets that can help. Alternatively you could utilise the services of a good book keeping service like
The local bookkeeper
The FD centre
Insight Associates
Wednesday, 29 September 2010
Pubfolio in administration
Pubfolio, the Trowbridge-headquartered pub operator, has gone into administration today. The administration is being handled by accountants PricewaterhouseCoopers, according to the Publican Magazine.
It has been a busy couple of days for insolvency practitioners as a number of companies have gone insolvent. It might have something to do with the rent quarter day being today!
It is believed that the smoking ban has also had a detrimental affect on the mainly community based pubs. In addition, the Anglo Irish Bank which has its own problems, is reluctant to put in more money.
It is not yet clear if some of the Pubfolio pubs will form part of a pre-pack administration.
It has been a busy couple of days for insolvency practitioners as a number of companies have gone insolvent. It might have something to do with the rent quarter day being today!
It is believed that the smoking ban has also had a detrimental affect on the mainly community based pubs. In addition, the Anglo Irish Bank which has its own problems, is reluctant to put in more money.
It is not yet clear if some of the Pubfolio pubs will form part of a pre-pack administration.
Elphinstone Estates in administration
Elphinstone Estates, the East Renfrewshire-based property developer, and several connected companies have gone into administration reported the Estates Gazette.
KPMG, the administrators, hope to sell the company's 18 sites and properties across Scotland.
In a statement KPMG said: “In common with many developers Elphinstone has experienced very challenging conditions in recent times. It has been impacted by the reduction in construction, particularly residential, activity, with demand for development sites dropping significantly with a consequent impact on land values."
Lloyds TSB Scotland Business Monitor has reported an improvement in the fortunes of companies in the region with 30% of companies in the region reporting an increase in turnover in the three months to August.
The Scottish property market did get somewhat overheated, so I expect to see more problems for construction and property businesses. KSA Group have rescued a construction company using a CVA and we have rescued a Scottish recruitment business using a CVA. Many people in Scotland assume that a CVA will not be approved by HMRC. On the contrary the HMRC team that deals with Scottish CVA’s attended the meeting and took part in the process. The CVA vote was 100% in favour and the CVA was accepted by creditors in December 2009 paying 33p in £1.
KPMG, the administrators, hope to sell the company's 18 sites and properties across Scotland.
In a statement KPMG said: “In common with many developers Elphinstone has experienced very challenging conditions in recent times. It has been impacted by the reduction in construction, particularly residential, activity, with demand for development sites dropping significantly with a consequent impact on land values."
Lloyds TSB Scotland Business Monitor has reported an improvement in the fortunes of companies in the region with 30% of companies in the region reporting an increase in turnover in the three months to August.
The Scottish property market did get somewhat overheated, so I expect to see more problems for construction and property businesses. KSA Group have rescued a construction company using a CVA and we have rescued a Scottish recruitment business using a CVA. Many people in Scotland assume that a CVA will not be approved by HMRC. On the contrary the HMRC team that deals with Scottish CVA’s attended the meeting and took part in the process. The CVA vote was 100% in favour and the CVA was accepted by creditors in December 2009 paying 33p in £1.
Tuesday, 28 September 2010
Cathco goes into administration
Cathco, the construction business based in Leicester, has gone into administration with Begbies Traynor acting as administrators. The cause of their demise appears to have been a sudden drop off in orders. It is not clear who their major clients were but the government is likely to have been one.
Work to build a 50,000 sq metre Tesco store and shops on Station Yard in Denbigh was due to begin over the summer.
Denbighshire’s leader Hugh Evans said the council still wants to make the project work, adding: “We are committed to supporting this development in Denbigh and are prepared to hold discussions with anyone who wants to push it forward.”
As well as Station Yard, Cathco is responsible for the new Menai Shopping Centre in Bangor which houses several large chain stores such as Debenhams, Body Shop, and River Island.
So this is another construction company that has gone into administration recently. The knock on effects of construction companies going into administration can be quite serious as many other industries and people benefit from construction activity. The construction industry has always been vulnerable to downturns in economic activity as they often cannot react quickly due to the capital intensive nature of their business.
Work to build a 50,000 sq metre Tesco store and shops on Station Yard in Denbigh was due to begin over the summer.
Denbighshire’s leader Hugh Evans said the council still wants to make the project work, adding: “We are committed to supporting this development in Denbigh and are prepared to hold discussions with anyone who wants to push it forward.”
As well as Station Yard, Cathco is responsible for the new Menai Shopping Centre in Bangor which houses several large chain stores such as Debenhams, Body Shop, and River Island.
So this is another construction company that has gone into administration recently. The knock on effects of construction companies going into administration can be quite serious as many other industries and people benefit from construction activity. The construction industry has always been vulnerable to downturns in economic activity as they often cannot react quickly due to the capital intensive nature of their business.
OFT Targets Debt Management Firms
The Office of Fair Trading (OFT) have found 129 debt management firms are
not meeting current standards. They have mainly been found to have misled consumers in their advertising by implying that their services are free.
In addition, customer advisers were found to be lacking in competence and to be providing poor advice based on inadequate information.
The OFT is therefore updating its guidance to take “explicit account of new and emerging unfair business practices”.
Ray Watson, director of the OFT’s Consumer Credit Group, said: “Debt management firms must be clear about their charges and the options available to customers.
In our view it is essential that these firms are brought to book. Many businesses and consumers, who are in need of help, may be discouraged from taking advice to try and solve their problems if they think that any advice is not value for money.
Insolvency practitioners have for years been pointing out that there is a large difference between insolvency work, that is regulated and licensed and by the authorities, and businesses in the debt management sector who are not regulated in any way.
not meeting current standards. They have mainly been found to have misled consumers in their advertising by implying that their services are free.
In addition, customer advisers were found to be lacking in competence and to be providing poor advice based on inadequate information.
The OFT is therefore updating its guidance to take “explicit account of new and emerging unfair business practices”.
Ray Watson, director of the OFT’s Consumer Credit Group, said: “Debt management firms must be clear about their charges and the options available to customers.
In our view it is essential that these firms are brought to book. Many businesses and consumers, who are in need of help, may be discouraged from taking advice to try and solve their problems if they think that any advice is not value for money.
Insolvency practitioners have for years been pointing out that there is a large difference between insolvency work, that is regulated and licensed and by the authorities, and businesses in the debt management sector who are not regulated in any way.
Monday, 27 September 2010
Creditors Voluntary Liquidation Notice
KSA Group Insolvency Notices
Taylor Woodworking Castleford Limited
Creditors Voluntary Liquidation Notice
Del Stone London Limited
Creditors Voluntary Liquidation Notice
Taylor Woodworking Castleford Limited
Creditors Voluntary Liquidation Notice
Del Stone London Limited
Creditors Voluntary Liquidation Notice
Dundee face administration for the second time.
Dundee, the Scottish football club, face administration for the second time in seven years after it emerged that they owed HMRC £250,000.
The club have fallen behind in payments over the last 2 years and have been hit by a demand for the balance to be cleared. I suspect that they were threatened with a winding up petition!
Dundee survived going into administration in 2003 with debts of £23m after fans' group Dee4Life helped raise funds.
Calum Melville, the club's director, told a Sunday paper that the HMRC used the words, 'wanted to bring Dundee to account and bring the rest of Scottish football to heel'.
If this is true then we can expect HMRC to start getting serious with overdue tax and make examples of high profile businesses! The time to pay scheme must be adhered to and any attempts to renegotiate terms are being rejected.
The club have fallen behind in payments over the last 2 years and have been hit by a demand for the balance to be cleared. I suspect that they were threatened with a winding up petition!
Dundee survived going into administration in 2003 with debts of £23m after fans' group Dee4Life helped raise funds.
Calum Melville, the club's director, told a Sunday paper that the HMRC used the words, 'wanted to bring Dundee to account and bring the rest of Scottish football to heel'.
If this is true then we can expect HMRC to start getting serious with overdue tax and make examples of high profile businesses! The time to pay scheme must be adhered to and any attempts to renegotiate terms are being rejected.
Friday, 24 September 2010
London CVA case studies added
We have just put up a recent case study about a retailer in London that we rescued using a CVA. The business continues to trade better than expected and a profit ratchet built into the CVA will result in a better return for the creditors.
Read the case study > http://www.companyrescue.co.uk/London-based-retailer-CVA-casestudy.aspx
Other London companies that we have helped can be seen on our case studies pages at http://www.companyrescuelondon.co.uk/London-CVA-Case-Studies.aspx
Read the case study > http://www.companyrescue.co.uk/London-based-retailer-CVA-casestudy.aspx
Other London companies that we have helped can be seen on our case studies pages at http://www.companyrescuelondon.co.uk/London-CVA-Case-Studies.aspx
Centrepoint landlords in administration move
Centrepoint owners, Targetfollow, have slammed Lloyds Banking Group's threat to appoint administrators over a £700m debt. It is understood that the company is unable to meet interest payments. Part of the problem is that there is a disagreement over the value of the company's portfolio. Lloyds reckon it is worth only £450m whereas the company values their portfolio at, funnily enough, £680m. It should be remembered that following the last recession valuations for banks by chartered surveyors are regulated by the Royal Institute of Chartered Surveyors (RICS). Of course, some have argued that they have been overly pessimistic about values following the credit crunch.
Lloyds Banking Group are under pressure to repay loans from the taxpayer. However, I expect to see much more of this sort of action if patience starts to run out with commercial property owners. Especially, if values start to soften a little.
Targetfollow have said they are taking legal advice on the matter.
Lloyds Banking Group are under pressure to repay loans from the taxpayer. However, I expect to see much more of this sort of action if patience starts to run out with commercial property owners. Especially, if values start to soften a little.
Targetfollow have said they are taking legal advice on the matter.
Thursday, 23 September 2010
Cash flow problems could be solved by managing cashflow daily
Does your company have a daily cash flow system in place? If not why not! Download our free daily cashflow template. Many large businesses look at their cashflow daily. You are far more likely to be able to spot potential problems ahead if you are regularly looking at it.
There is an old saying; " Turnover is vanity, profit is sanity and cashflow is reality."
Fill out the cashflow and use every day to see "where you are" and what problems lie ahead. Plug in the dates that each customer that owes you money should pay you, then you have a guide to use for debtor collection
Our daily cashflow model will at a glance point out any major problems that lie ahead. It will also help with the following;
Debtor collection: are your customers taking longer to pay you? If so why is this? Best thing to do is to find out by asking how things are going with ALL of your customers, you can assess your own debtor collection dates, find out how they are doing and market to them. And then update the daily cashflow, it should show when customers are likely to pay you.
Cost cutting: Good cashflow management goes hand in hand with cost cutting, when you see daily figures it helps focus the mind! Please take a look at our cost cutting tips on our site.
There is an old saying; " Turnover is vanity, profit is sanity and cashflow is reality."
Fill out the cashflow and use every day to see "where you are" and what problems lie ahead. Plug in the dates that each customer that owes you money should pay you, then you have a guide to use for debtor collection
Our daily cashflow model will at a glance point out any major problems that lie ahead. It will also help with the following;
Debtor collection: are your customers taking longer to pay you? If so why is this? Best thing to do is to find out by asking how things are going with ALL of your customers, you can assess your own debtor collection dates, find out how they are doing and market to them. And then update the daily cashflow, it should show when customers are likely to pay you.
Cost cutting: Good cashflow management goes hand in hand with cost cutting, when you see daily figures it helps focus the mind! Please take a look at our cost cutting tips on our site.
Voluntary liquidation page
Just added a new page to our liquidatemycompany.com website. A quick guide to the two kinds of voluntary liquidation. Members voluntary liquidation and creditors voluntary liquidation.
Archial Architects in administration
Archial Group went into administration, last night, after HMRC rejected a payments deal for tax owed from previous years. HMRC issued a winding up petition that marked the end for a firm that was listed on AIM and shares were worth some £1.89 in 2007. Before shares were suspended last month they were worth 1.5p. The firm blamed public spending cuts on its demise.
The administrators from PricewaterhouseCoopers are looking for a quick sale of Archial as a going concern.
It isn't clear exactly how much tax was owed, but HMRC will generally listen sympathetically to requests for VAT and PAYE owed to be spread out over time under the HMRC Time to Pay Scheme. However, on corporation tax they are less flexible.
If you are having problems with paying tax then talk to us and we can talk to HMRC for you.
Wednesday, 22 September 2010
Liquidation likely for Britannia Land Management Ltd
Britannia Land Management Ltd, the sellers of plots of land, has been issued with a winding up petition. The petition presented at the High Court by the Secretary of State for Business, Innovation & Skills was made on the grounds of public interest. The court date is set for the 18th October 2010. A provisional liquidator has been appointed to ensure that the company's assets are protected.
We do not have any further details at this stage but will keep you posted. The petition to wind up the company follows an investigation carried out by Companies Investigations branch of the Insolvency Service. Selling plots of lands from a telesales operation in Spain was always going to attract the interest of the authorities. No doubt some people have not had a satisfactory return on their investment!
Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN, or alternatively people may ring 0161 234 8531.
We do not have any further details at this stage but will keep you posted. The petition to wind up the company follows an investigation carried out by Companies Investigations branch of the Insolvency Service. Selling plots of lands from a telesales operation in Spain was always going to attract the interest of the authorities. No doubt some people have not had a satisfactory return on their investment!
Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN, or alternatively people may ring 0161 234 8531.
5 Simple Steps to Liquidate Your Company
Is your company not viable? Is it running out of cash? No future?
ACT NOW, do not leave it until it is too late.....
Step 1 – Find a Liquidator. We can help as we have a number of insolvency practitioners. Uniquely to KSA, YOU can speak to one of our IP's TODAY, if you call now on 0800 9700539. It is not possible to liquidate your own company, as the law just doesn’t allow it.
Step 2 - Pass details of any company assets over to the proposed liquidator, and our valuers may get these valued. This will independently set the value of the assets for going to auction, or you may wish to buy them.
Step 3 – Let us know who the company owes money to (creditors). KSA will write to them all to let them know what’s happening and tell them that a creditors meeting will be held. This will quickly remove creditor pressure from YOU and they will start talking to KSA instead!
Step 4 – Give us all company information and books and records. KSA will give you a list of all the information we need in order to liquidate your company. This information will allow us to prepare the necessary reports for the creditors.
Step 5 – A company director needs to "chair the meeting of creditors". In actual fact the liquidator will run the meeting but you or one of your directors must attend it by law. The meeting of creditors is usually a simple short meeting with no one attending.
Call us now to talk through the issues and get free advice, 0800 9700539. If you're based in the South East call 020 7877 0050. Based in the north? Call 01289 309431 or 0191 483 343.
What does liquidation mean and how does it work? How to people go about winding up a company? What are the risks for directors of wrongful trading? Can I be a director of another company, if we liquidate this company (yes)?
Get more information and answers to these questions by calling or click here
ACT NOW, do not leave it until it is too late.....
Step 1 – Find a Liquidator. We can help as we have a number of insolvency practitioners. Uniquely to KSA, YOU can speak to one of our IP's TODAY, if you call now on 0800 9700539. It is not possible to liquidate your own company, as the law just doesn’t allow it.
Step 2 - Pass details of any company assets over to the proposed liquidator, and our valuers may get these valued. This will independently set the value of the assets for going to auction, or you may wish to buy them.
Step 3 – Let us know who the company owes money to (creditors). KSA will write to them all to let them know what’s happening and tell them that a creditors meeting will be held. This will quickly remove creditor pressure from YOU and they will start talking to KSA instead!
Step 4 – Give us all company information and books and records. KSA will give you a list of all the information we need in order to liquidate your company. This information will allow us to prepare the necessary reports for the creditors.
Step 5 – A company director needs to "chair the meeting of creditors". In actual fact the liquidator will run the meeting but you or one of your directors must attend it by law. The meeting of creditors is usually a simple short meeting with no one attending.
Call us now to talk through the issues and get free advice, 0800 9700539. If you're based in the South East call 020 7877 0050. Based in the north? Call 01289 309431 or 0191 483 343.
What does liquidation mean and how does it work? How to people go about winding up a company? What are the risks for directors of wrongful trading? Can I be a director of another company, if we liquidate this company (yes)?
Get more information and answers to these questions by calling or click here
Tuesday, 21 September 2010
CK Buggies in Liquidation
CK Buggies has gone into liquidation, with a creditors meeting scheduled for this Friday. CK buggies specialised in prams and car seats. They had expanded rapidly and had just moved to larger premises. However, the recession has been blamed for the sudden drop in turnover.
The liquidators, Geoffrey Martin and Co, said yesterday that local shoppers and internet shoppers, had been affected. He urged any creditors to come forward before the meeting.
For a guide to the liquidation procedure please take a look at our site.
The liquidators, Geoffrey Martin and Co, said yesterday that local shoppers and internet shoppers, had been affected. He urged any creditors to come forward before the meeting.
For a guide to the liquidation procedure please take a look at our site.
Administration close for Cattles
Cattles, the subprime lender, is in talks with its lenders to try and avoid insolvency. We understand from the Sunday Times and other sources that a administrators from, Zolfo Cooper, have been lined up if the talks fail. The firm lent money through a variety of brands like Welcome Finance to people with a poor credit history during the credit boom and at one point was valued at £1bn. Its divisions Cattles Invoice Finance was sold off some time ago and is now owned by Aldermore.
Now that the company is fighting to survive, some of the bondholders, mostly hedge funds and investment banks, could call in their debt and force the company into insolvency. These bond holders have walked away from negotiations saying they do not get enough out of the planned restructure. The exit of the bondholders comes after the Court of Appeal in May upheld a decision by the High Court to give RBS precedence over bondholders in the ranking of creditors.
Under the plan, major creditors such as the Royal Bank of Scotland would be paid with funds from Cattles' Welcome Finance subsidiary, leaving little for bondholders, whose debt is tied to the parent company. The proposed deal aims to take the company private after paying 1p per share.
We would expect that this could result in serious impairment charges for the banks and a serious headache for the bond holders. With a total outstanding loan book some £200m less than senior debt and bonds, there is surely a major deficiency ahead.
Now that the company is fighting to survive, some of the bondholders, mostly hedge funds and investment banks, could call in their debt and force the company into insolvency. These bond holders have walked away from negotiations saying they do not get enough out of the planned restructure. The exit of the bondholders comes after the Court of Appeal in May upheld a decision by the High Court to give RBS precedence over bondholders in the ranking of creditors.
Under the plan, major creditors such as the Royal Bank of Scotland would be paid with funds from Cattles' Welcome Finance subsidiary, leaving little for bondholders, whose debt is tied to the parent company. The proposed deal aims to take the company private after paying 1p per share.
We would expect that this could result in serious impairment charges for the banks and a serious headache for the bond holders. With a total outstanding loan book some £200m less than senior debt and bonds, there is surely a major deficiency ahead.
Monday, 20 September 2010
Liquidation procedure - A simple guide
I have just added a couple of simple guides to our site on the following topics.
Winding up a company
liquidation procedure
Keep looking on this blog for new pages as we are adding new ones all the time.
Winding up a company
liquidation procedure
Keep looking on this blog for new pages as we are adding new ones all the time.
Director disqualified for repaying loan whilst business was insolvent
Gordon Richardson, the director of the Beanscene coffee house chain, has been banned from being a company director after an inquiry following the firms collapse. The two-year investigation was launched after Beanscene failed in July 2008 with debts of £3.7 million. Beanscene at its peak had 15 Cafes throughout Scotland and planned to open another 45.
The disqualification comes as the result of an investigation by the Insolvency Service which found the Beanscene director had taken £189,000 from the company to pay back a loan while it was technically insolvent. Richardson, from Pollokshields, Glasgow, has now been told he cannot take part in the running or formation of a company unti l September 2016.
The married father-of-two also has to resign his directorships of other companies.
An Insolvency Service spokesman said: "The disqualification of Gordon Richardson should offer the public reassurance. The Insolvency Service will not hesitate to use its powers to remove dishonest and reckless people from the business environment."
The message here is clear!
Even if the company owes you money you must not create a potential preference for any creditor. If the company is technically insolvent then you must act reasonably and treat all creditors equally, even if your are a creditor yourself. For more details on how to find out if you are technically insolvent and avoid an action for wrongful trading please read our extensive guides on our website
The disqualification comes as the result of an investigation by the Insolvency Service which found the Beanscene director had taken £189,000 from the company to pay back a loan while it was technically insolvent. Richardson, from Pollokshields, Glasgow, has now been told he cannot take part in the running or formation of a company unti l September 2016.
The married father-of-two also has to resign his directorships of other companies.
An Insolvency Service spokesman said: "The disqualification of Gordon Richardson should offer the public reassurance. The Insolvency Service will not hesitate to use its powers to remove dishonest and reckless people from the business environment."
The message here is clear!
Even if the company owes you money you must not create a potential preference for any creditor. If the company is technically insolvent then you must act reasonably and treat all creditors equally, even if your are a creditor yourself. For more details on how to find out if you are technically insolvent and avoid an action for wrongful trading please read our extensive guides on our website
Friday, 17 September 2010
HMRC to become more aggressive at collecting tax
The HMRC is feeling the pressure lately, not just due to inaccuracies in the PAYE system. Official figures showed that the annual amount of uncollected tax has reached a record £42billion. This represents a staggering 10% of money owed to the tax man goes unpaid.
Whatever happens the HMRC will need to collect taxes it is owed eventually. Apart from tax evasion and inaccuracies of its own making the time to pay scheme (TTP) will no doubt be looked at.
Thousands of businesses have been given time to pay their VAT and PAYE that they owe as the government would rather see them pay something rather than go under. I suspect that HMRC will be far less willing to give companies TTP schemes in the future and will be tougher in enforcing any non compliance. In the end HMRC are better than most at collecting their debts... A winding up petition tends to force the issue. If you are threatened with a winding up petition by a creditor then you need to take immediate action as once served your options are more limited.
Whatever happens the HMRC will need to collect taxes it is owed eventually. Apart from tax evasion and inaccuracies of its own making the time to pay scheme (TTP) will no doubt be looked at.
Thousands of businesses have been given time to pay their VAT and PAYE that they owe as the government would rather see them pay something rather than go under. I suspect that HMRC will be far less willing to give companies TTP schemes in the future and will be tougher in enforcing any non compliance. In the end HMRC are better than most at collecting their debts... A winding up petition tends to force the issue. If you are threatened with a winding up petition by a creditor then you need to take immediate action as once served your options are more limited.
Thursday, 16 September 2010
Public sector cuts likely to affect younger firms
Recent research by R3, the insolvency trade body, has caused quite a stir when they said that upto 150,000 businesses could become insolvent following public sector cuts. Most interestingly, is the observation that companies founded in the 90's and 2000's are most at risk. Whereas, older companies are more resilient. It isn't just the fact that older companies are generally wiser but they have not become too dependent on public sector work!
R3 have based their statistics on companies with a turnover £50,000 to £1m. Their research was conducted amongst 301 firms which were started in the 90s or 2000s, with over 33% stating that their business relied primarily on those public sector contracts.
So what next? Lets hope that HMRC will not want to see these businesses going into liquidation but would rather they restructured their debts and continue to trade. If your business is likely become insolvent then make sure your know your options.
R3 have based their statistics on companies with a turnover £50,000 to £1m. Their research was conducted amongst 301 firms which were started in the 90s or 2000s, with over 33% stating that their business relied primarily on those public sector contracts.
So what next? Lets hope that HMRC will not want to see these businesses going into liquidation but would rather they restructured their debts and continue to trade. If your business is likely become insolvent then make sure your know your options.
Wednesday, 15 September 2010
Trent Concrete is in administrative receivership
Trent Concrete, which specialises in pre-cast concrete, has fallen into administrative receivership NOT administration. The latest casualty in the building sector that is feeling the pressure from uncertainty around public sector projects.
"Richard Philpott, from KPMG Restructuring, said: “The business has historically been engaged in long term contracts and its pipeline of future work has suffered from the inherent uncertainties surrounding various public sector projects. " he went on to say, “During the last 12 months it has also suffered a significant drop in turnover, leading ultimately to the cash pressures and trading difficulties faced by the business today.”
KPMG also said that they were looking to trade the company whilst in administrative receivership.
So what is administrative receivership? It is not the same as administration
A receiver is appointed by a floating charge holder – this is typically a bank.
"Richard Philpott, from KPMG Restructuring, said: “The business has historically been engaged in long term contracts and its pipeline of future work has suffered from the inherent uncertainties surrounding various public sector projects. " he went on to say, “During the last 12 months it has also suffered a significant drop in turnover, leading ultimately to the cash pressures and trading difficulties faced by the business today.”
KPMG also said that they were looking to trade the company whilst in administrative receivership.
So what is administrative receivership? It is not the same as administration
A receiver is appointed by a floating charge holder – this is typically a bank.
So what does this mean?
1.The company requires finance for its activities and borrows from a bank (or other secured lender).
2. In consideration for providing the loan the bank requires security. Normally the company will sign a debenture with a fixed and floating charge. This allows the bank security over the assets of the company.
3. If the terms of the agreement are breached or the company does not conform to the bank's wishes the charge holder can:
a) Appoint investigating accountants to ascertain how secure or not the bank's debt is and what is the best route forward (not always receivership).
b) Demand formal repayment of the loans without notice.
c) Appoint a receiver to administer and receive the company's assets in this case KPMG
4. The receiver has a duty to collect the bank's debts only, he/she is not generally concerned with the other unsecured creditors or shareholders' exposure. So unfortunately the non secured creditors are unlikely to receive anything much.
There are other options available such as a company voluntary arrangement (CVA)
Funnily enough we rescued a building company in the North East using a CVA.
For details of how this building company was rescued please read our case study; CVA Rescues Building Company in the North East
Unemployment rate still high.
The number of unemployed stands at 7.8% or 2.47m. Although the figures are not as bad as many predicted at the height of the credit crunch in 2008 we are still not out of the woods. The rate shows a 0.1% improvement on the 3 month period April to June.
Unfortunately, there is no doubt that with large public sector jobs lost we will see unemployment rise further. According to R3, many businesses feel they are heavily reliant on public sector contracts which could lead to further jobs lost in the private sector . If you think that your business is at risk then you should put plans in place now!
Talk to me and I can guide you through your options. For detailed guides please take a look at my company rescue site.
Unfortunately, there is no doubt that with large public sector jobs lost we will see unemployment rise further. According to R3, many businesses feel they are heavily reliant on public sector contracts which could lead to further jobs lost in the private sector . If you think that your business is at risk then you should put plans in place now!
Talk to me and I can guide you through your options. For detailed guides please take a look at my company rescue site.
Tuesday, 14 September 2010
High cotton prices to hit clothing retailers
The effect of high cotton prices is going to be felt on the UK high street. The recent surge in cotton prices, to a 15 year high, is likely to put added pressure on clothing retailers who will also be looking ahead to the VAT rise next year.
Of course, it may be that they can pass on their higher costs to the consumer but as the market is so competitive I expect that many of them will have no choice but to try and absorb the costs. Future spending cuts will certainly also dampen consumer demand.This will mean that some will not survive.
However, terminal insolvency is not necessarily the end result. Struggling retailers might consider using a CVA if they become insolvent due to the higher cotton prices. If the cotton prices fall, and the profits increase, then our CVAs have a "profit ratchet" in them to allow creditors to receive more money over the lifetime of the CVA.
Of course, it may be that they can pass on their higher costs to the consumer but as the market is so competitive I expect that many of them will have no choice but to try and absorb the costs. Future spending cuts will certainly also dampen consumer demand.This will mean that some will not survive.
However, terminal insolvency is not necessarily the end result. Struggling retailers might consider using a CVA if they become insolvent due to the higher cotton prices. If the cotton prices fall, and the profits increase, then our CVAs have a "profit ratchet" in them to allow creditors to receive more money over the lifetime of the CVA.
Monday, 13 September 2010
Recruitment businesses struggling
Double Dip recession for Recruiters?
After a period of steady recovery and catching up with legacy debts from the boom period, many recruiters have only just got themselves back to profitability and we learn that a recent fall in vacancies could lead them back to recession in 2010-11. So do Recruiters face a double dip ahead?
With hundreds of recruiters in time to pay deals with HMRC, according to Begbies Traynor's Red Flag Alert, KSA Group is seeing a marked increase in enquiries from the recruitment sector. We have successfully turned around over 20 recruitment firms including a £3.5m turnover Scottish based recruitment business.
To enable recruiters to learn quickly all about the many issues and options to restructure their business, KSA has launched a unique 96 page guide to turning around or restructuring your struggling or insolvent recruitment company.
Learn the trade secrets of the UK’s leading SME turnaround advisor and company voluntary arrangement expert; Keith Steven. His team can rapidly take away cashflow pressures and get recruiters focused on the job of recruiting NOT firefighting.
After a period of steady recovery and catching up with legacy debts from the boom period, many recruiters have only just got themselves back to profitability and we learn that a recent fall in vacancies could lead them back to recession in 2010-11. So do Recruiters face a double dip ahead?
With hundreds of recruiters in time to pay deals with HMRC, according to Begbies Traynor's Red Flag Alert, KSA Group is seeing a marked increase in enquiries from the recruitment sector. We have successfully turned around over 20 recruitment firms including a £3.5m turnover Scottish based recruitment business.
To enable recruiters to learn quickly all about the many issues and options to restructure their business, KSA has launched a unique 96 page guide to turning around or restructuring your struggling or insolvent recruitment company.
Learn the trade secrets of the UK’s leading SME turnaround advisor and company voluntary arrangement expert; Keith Steven. His team can rapidly take away cashflow pressures and get recruiters focused on the job of recruiting NOT firefighting.
Friday, 10 September 2010
KSA Group Liquidation Notice
KSA Group Creditors Voluntary Liquidation Notice
Search and Secure Limited - Meeting of creditors
http://www.companyrescue.co.uk/insolvency-notices/search-and-secure-limited-liquidation-notice
Search and Secure Limited - Meeting of creditors
http://www.companyrescue.co.uk/insolvency-notices/search-and-secure-limited-liquidation-notice
Small Businesses Facing Insolvency
10 percent of small businesses could be pushed into insolvency if they lose their public sector contracts, according to research by R3, the insolvency trade body.A third of businesses said they were "over reliant on public sector contracts". This 'worst case' scenario would mean 148,000 businesses could be placed into corporate insolvency.
As per my previous blog, I suspect a fair few of these will be in the North and the Midlands.
Spending Cuts affecting North East
Spending Cuts
Many people have asked "where will the axe fall?" Most observers are interested in which services and benefits will be cut. However, as the cuts draw nearer it is becoming apparent that certain regions of the country are going to be hit harder than others. Looks like the North and the Midlands will be hit hard as past governments have tried to stimulate growth in the region by increased spending there.
Manufacturing, traditionally a strong industry in the North and Midlands, has seen a bit of a renaissance of late but this is unlikely to be able to replace the money in the economy that is lost through public sector cuts.
If you are based in the North and rely on government spending for your business, now might be the time to seek advice..
Company Rescue North East
Many people have asked "where will the axe fall?" Most observers are interested in which services and benefits will be cut. However, as the cuts draw nearer it is becoming apparent that certain regions of the country are going to be hit harder than others. Looks like the North and the Midlands will be hit hard as past governments have tried to stimulate growth in the region by increased spending there.
Manufacturing, traditionally a strong industry in the North and Midlands, has seen a bit of a renaissance of late but this is unlikely to be able to replace the money in the economy that is lost through public sector cuts.
If you are based in the North and rely on government spending for your business, now might be the time to seek advice..
Company Rescue North East
Thursday, 9 September 2010
CVA rescues recruitment business in Scotland
Another good case study of how a CVA can help rescue a recruitment business.
A Scottish based recruitment business had seen its turnover fall from a peak of £6.75m in 2007 to c. £3.5m in 2009/10. The recession caused this sharp decline in sales as companies stopped hiring.
Most particularly the business had suffered from bad debts from customers linked to the construction industry.
If you listen to critics in Scotland they will tell you that no CVA’s are supported by HMRC! On the contrary the HMRC team that deals with Scottish CVA’s attended the meeting and took part in the process. The CVA vote was 100% in favour and the CVA was accepted by creditors in December 2009 paying 33p in £1. The business continues to trade well.
Read our full case study on how KSA Group used a CVA to rescue a recruitment business
A Scottish based recruitment business had seen its turnover fall from a peak of £6.75m in 2007 to c. £3.5m in 2009/10. The recession caused this sharp decline in sales as companies stopped hiring.
Most particularly the business had suffered from bad debts from customers linked to the construction industry.
If you listen to critics in Scotland they will tell you that no CVA’s are supported by HMRC! On the contrary the HMRC team that deals with Scottish CVA’s attended the meeting and took part in the process. The CVA vote was 100% in favour and the CVA was accepted by creditors in December 2009 paying 33p in £1. The business continues to trade well.
Read our full case study on how KSA Group used a CVA to rescue a recruitment business
CVA Rescues Building Company in the North East
I have updated our site with a case study that shows how a CVA can be a powerful tool in saving companies.
This particular building company encountered financial difficulties because of the costs incurred in the diversification of the business, in particular into electrical contracting.
The financial status was difficult with trade creditors owed some £40k and HMRC £110k. No creditors had started legal action and Employees’ claims in insolvency would have amounted to c.£100,000. So making people redundant was unaffordable.
The business had an overdraft facility of £150k with RBS. This bank is well known for blocking pre-pack administrations where the business is sold to the same directors.
So after a meeting with KSA Group a rescue plan was put together.
For details of how this building company was rescued please read our case study; CVA Rescues Building Company in the North East
This particular building company encountered financial difficulties because of the costs incurred in the diversification of the business, in particular into electrical contracting.
The financial status was difficult with trade creditors owed some £40k and HMRC £110k. No creditors had started legal action and Employees’ claims in insolvency would have amounted to c.£100,000. So making people redundant was unaffordable.
The business had an overdraft facility of £150k with RBS. This bank is well known for blocking pre-pack administrations where the business is sold to the same directors.
So after a meeting with KSA Group a rescue plan was put together.
For details of how this building company was rescued please read our case study; CVA Rescues Building Company in the North East
KSA Group Liquidation Notice
KSA Group Liquidation Notice
Italian Cash and Carry Limited - Meeting of Creditors
http://www.companyrescue.co.uk/insolvency-notices/the-italian-cash-and-carry-limited-liquidation-notice
Italian Cash and Carry Limited - Meeting of Creditors
http://www.companyrescue.co.uk/insolvency-notices/the-italian-cash-and-carry-limited-liquidation-notice
Wednesday, 8 September 2010
HMRC chasing VAT and PAYE from small businesses
Despite losing in a complex and high profile case in the House of Lords (Arctic), HMRC are pursuing family run businesses that they believe are evading tax by breaking the rules on income shifting. This is particularly relevant to businesses that are run by husband and wife teams. The problem arises where there has been an allocation of shares that pay dividends but the consideration for those shares do not reflect the time that the shareholder puts into the business.
HMRC are planning to investigate more husband and wife type companies and will no doubt be cracking down on small business people that they feel are evading tax. As the only source of income may be the employer company then this could in turn place pressure on the business cashflow. If directors are found to be breaking the rules then the HMRC are likely to be firm in collecting unpaid tax. This in turn could push businesses into trouble.
If HMRC are threatening actions to collect taxes, or if the business has unpaid PAYE, VAT, corporation tax and is threatening legal action to wind up the company then directors should act quickly. Contact KSA Group on 0800 9700 539 if you need some advice on dealing with company tax problems.
HMRC are planning to investigate more husband and wife type companies and will no doubt be cracking down on small business people that they feel are evading tax. As the only source of income may be the employer company then this could in turn place pressure on the business cashflow. If directors are found to be breaking the rules then the HMRC are likely to be firm in collecting unpaid tax. This in turn could push businesses into trouble.
If HMRC are threatening actions to collect taxes, or if the business has unpaid PAYE, VAT, corporation tax and is threatening legal action to wind up the company then directors should act quickly. Contact KSA Group on 0800 9700 539 if you need some advice on dealing with company tax problems.
Tuesday, 7 September 2010
Is the Tube strike putting extra strain on your London business?
Is today's tube strike putting extra strain on your company's cashflow?
Disruption to major tube services might push some businesses over the brink. If meetings are delayed it will mean that business might be put on hold.
The London chamber of commerce estimates that London businesses will lose £48m. Of course, if you have customers in London but are based elsewhere this will still affect you. If you are based in London but with customers outside London it is still a major headache.
Want to talk to someone in London if this strike is the last straw? Then please take a look at our site for struggling London businesses
Disruption to major tube services might push some businesses over the brink. If meetings are delayed it will mean that business might be put on hold.
The London chamber of commerce estimates that London businesses will lose £48m. Of course, if you have customers in London but are based elsewhere this will still affect you. If you are based in London but with customers outside London it is still a major headache.
Want to talk to someone in London if this strike is the last straw? Then please take a look at our site for struggling London businesses
What does going into administration mean?
We are often asked, "one of our customers / my employer is going into administration, please tell me what does going into administration mean"?
Unfortunately, for unsecured creditors ( trade creditors ) are unlikely to get anything back from the administrator.
Very rarely can administrators sell the assets and the business to generate sufficient monies to pay the bank (usually the secured creditors) in full, plus the unsecured creditors. What is more they will need to get paid their fee!
What about employees? Well it is, on the whole, bad news. The administrators have to take on the employee's rights after 14 days of being in office (as administrator), As such the administrators want to sell or close the business before they take on that risk.
So the administrator(s) will look at which parts of the business are viable and which should be closed. Then they will make the employees, who are surplus to requirements, redundant as quickly as possible.
Employees made redundant by an insolvency practitioner should visit our employees guide page.
Unfortunately, for unsecured creditors ( trade creditors ) are unlikely to get anything back from the administrator.
Very rarely can administrators sell the assets and the business to generate sufficient monies to pay the bank (usually the secured creditors) in full, plus the unsecured creditors. What is more they will need to get paid their fee!
What about employees? Well it is, on the whole, bad news. The administrators have to take on the employee's rights after 14 days of being in office (as administrator), As such the administrators want to sell or close the business before they take on that risk.
So the administrator(s) will look at which parts of the business are viable and which should be closed. Then they will make the employees, who are surplus to requirements, redundant as quickly as possible.
Employees made redundant by an insolvency practitioner should visit our employees guide page.
Connaught going into administration
It looks as if Connaught Group, the property services group that specialises in social housing, is going into administration today. An announcement is expected soon.
If you are an employee of Connaught Group then please take a look at our guide on employee rights in an administration.
If you are an employee of Connaught Group then please take a look at our guide on employee rights in an administration.
Friday, 3 September 2010
Is the Economy's services engine spluttering?
Markit reports today that the PMI (purchasing managers index) for the services sector fell, the Markit/CIPS latest services index fell to 51.3 in August from 53.1 in July, still above the 50 mark that divides expansion from contraction. But the lowest level for some months.
Businesses from banks, to accountancy firms and hairdressers are interviewed to build this survey.
If the downward trend continues we will see contraction in the economy. Services account for nearly 2/3rds of the economy so the next survey will surely be watched carefully by Hawks.
KSA people talk to scores of businesses across the UK everyday and our view is that debtor days are rising, banks are (generally) not lending and cashflow is tight for many small to medium sized companies; if sales fall too this could be a perfect storm for many SME's
Businesses from banks, to accountancy firms and hairdressers are interviewed to build this survey.
If the downward trend continues we will see contraction in the economy. Services account for nearly 2/3rds of the economy so the next survey will surely be watched carefully by Hawks.
KSA people talk to scores of businesses across the UK everyday and our view is that debtor days are rising, banks are (generally) not lending and cashflow is tight for many small to medium sized companies; if sales fall too this could be a perfect storm for many SME's
Wednesday, 1 September 2010
In a company liquidation, as a director, how does it affect me personally?
The man in a pub does not know about company liquidation. It is not true that if you liquidate a company then it means you cannot be a company director again. Having a limited liability company means that the directors generally have limited liability if the company fails, as long as they have acted properly and acted in time.
However, if you fail to act properly and reasonably by continuing to take credit KNOWING that the company cannot repay it, then you may be at risk of personal financial loss. If you do this then you risk being accused of wrongful trading, as defined in the Insolvency Act 1986. If the business is subsequently wound up under compulsory liquidation or creditors voluntary liquidation then the Official Receiver is duty bound to investigate the actions of the directors. If you trade ‘wrongfully’ then you may be personally liable for the company’s debts.
So, voluntary liquidation is the most efficient way to deal with an insolvent company that has no future. As a director of an insolvent company, you are at risk if you do not act. This risk RISES the longer you don’t act to put the company into liquidation.
However, if you fail to act properly and reasonably by continuing to take credit KNOWING that the company cannot repay it, then you may be at risk of personal financial loss. If you do this then you risk being accused of wrongful trading, as defined in the Insolvency Act 1986. If the business is subsequently wound up under compulsory liquidation or creditors voluntary liquidation then the Official Receiver is duty bound to investigate the actions of the directors. If you trade ‘wrongfully’ then you may be personally liable for the company’s debts.
So, voluntary liquidation is the most efficient way to deal with an insolvent company that has no future. As a director of an insolvent company, you are at risk if you do not act. This risk RISES the longer you don’t act to put the company into liquidation.
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