A Winding Up Petition is probably the most serious existential threat that a company can be exposed to. If the petition succeeds, the company will be placed into compulsory liquidation and will cease to exist. There is a fixed procedure and timetable for the various steps involved, and it pays to understand the process. It is also highly advisable for a company so threatened to urgently seek the advice of a licensed insolvency practitioner. The sooner this happens, the greater the likelihood of a satisfactory outcome.
Topics: Winding Up Petition
2017 saw a flurry of letters from HMRC arriving on the doorsteps of Employee Benefit Trust (EBT) users. This is part of HMRC’s ongoing war on ‘tax avoidance’ schemes initiated in 2010. Employee Benefit Trusts have been used extensively since the 1980s to reduce the tax burden on employees. The idea is that salary payments are made not to the employee directly, but are paid to the trust by the employer. The employee then receives loan advances from the EBT.
Some emails that come through to my work inbox are a pleasure to receive, none more so than our quarterly giving summary from B1G1. B1G1 is a business giving scheme that allows companies to link charitable giving to specific business processes. This makes charitable giving scalable and affordable – growing as your business grows and never negatively impacting your cash flow.
Phil Wood, Managing Director of Barringtons Corporate Recovery and President of the Staffs, Salop and Wolverhampton Society of the Institute of Chartered Accountants reports that the Q4 insolvency statistics released today show a mixed picture with a reduction on Q3 company insolvencies but a static picture in individual insolvencies. However, these figures are expected to get worse for businesses in Q1 2018, as consumers are tightening their purse strings post-Christmas. ICAEW reminds businesses facing insolvency to seek help earlier and help encourage recovery.
The collapse of construction service giant Carillion Plc, the second largest construction business in the UK, has sent shockwaves throughout the sector. From a reported revenue of £5.2 billion in 2016, the once mighty business collapsed into compulsory liquidation on 15th of January 2018.
This is terrible news for Carillion’s 20,000 direct employees in the UK, as well as its hundreds of clients across the construction, civil engineering and facilities management sectors. The insolvency is also likely to have a big impact on Carillion’s UK sub-contractors, estimated to include 30,000 SMEs.
New business rate changes, as a result of the government’s recent property valuations, are calculated by looking at a property’s rateable value, and the rate in the pound that is set by the central government. The change in business rates took place in April 2017. Although these changes are considered to be ‘fiscally or revenue neutral’ by the government, the changes will see a redistribution of the tax burden among businesses.
Topics: Insolvency Practitioner
There are several reasons that businesses fail; changes in the market, leadership issues and strategic failures are just a few of the many things that can cause a company to close its doors. A recent study revealed just how common business failure is, reporting that not even half of business start-ups will survive past five years.1
Since 2016, HMRC are becoming more and more persistent in issuing and attempting to enforce their controversial Accelerated Payment Notices (APNs). An APN is a retrospective tax bill issued in regard to payments made to an Employee Benefit Trust, or so-called ‘tax avoidance scheme’. APNs can be issued to registered companies, partnerships or sole traders, and can demand substantial sums. An APN issued in February 2016 to a British expat based in Spain, for instance, amounted to a claim of £640,000.
Topics: Insolvency Practitioner
Two Birmingham-based company directors were sentenced to imprisonment on 31st July 2017 for unlawfully diverting company funds to their own bank accounts in advance of a winding up petition. The case of the husband and wife duo is a classic example of how not to handle an insolvency situation, and how dishonesty and malpractice made a failed business situation drastically worse for everyone involved.
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