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KSA Group's Nottingham Office

KSA Group is keen to promote the rescue culture in the East Midlands.  As such, we have an office at 35 Park Row in Nottingham where you can come and meet our Regional Manager, George E Davis.  He can advise the directors of a struggling business on ALL the options.

Alternatively, he is more than happy to visit you at your offices if you so wish.

Read our case study on how we rescued a £600k manned guarding company based in the East Midlands.

Insolvency Statistics Again

It came as a bit of a surprise to many that the insolvency statistics were not worse in the last quarter of 2011. These showed a year on year fall.  Also, Experian has published their latest set and it shows an improving trend as well.  The insolvency rate in January 2012 was just 0.07% which was the same as January 2011.  January is on the whole a better month for businesses as they have benefited from the Christmas trading period.   Smaller firms have done better with businesses with 101 to 500 employees saw a failure rate of 0.1 per cent, less than half the 0.21 per cent rate recorded in December.

So why do people think things are going badly for UK businesses?  A clue is in the spread of the pain.  In fact businesses with more than 500 employees have seen a rise in the insolvency rate from 0.07%  in January 2011 to 0.2% this last month.   That will be why..  Larger business failures get the headlines and January was a particularly bad month for some of the UK's high street retailers.  Even Tesco issued a profit warning.

Generally speaking, insolvency statistics are not a great indicator of economic health as they are not "weighted" in terms of impact.  A couple of small shops going under does not have the same impact as a large business shedding jobs but not actually becoming insolvent.

Who is the Official Receiver?

The term "Official Receiver" or "OR" is often used in the insolvency context.  So who is the official receiver and what do they do?  Read our new pages on the Official Receiver

MJN Colston in administration

MJN Colston, the teeside building services firm, has gone into administration with the loss of 146 jobs and another 420 at risk.  The business has offices in Gateshead, Blackburn, Coventry, Bury St Edmunds, Croydon, Bristol, Bridgend and Exeter.

The firm had been involved in mechanical and electrical contracting in some high profile public and private projects such as the redevelopment of RAF Northolt and Paddington Station.

In a statement, joint administrators Daniel Butters and Matt Cowlishaw, said: "We intend to trade the business in the short-term with a view to selling and novating the contracts to other providers.

It is not clear at the moment what has precipitated this collapse.  However a number of building companies have found themselves in difficulty as some of the major public projects have been put on hold.

Peacocks' stores bought out of administration

The Edinburgh Woollen Mill has emerged as the buyer of 338 stores belonging to the stricken Peacocks chain.  The remaining 224 stores will be closed with the loss of some 3000 jobs.

Private equity backed Edinburgh Woollen Mill was a surprise bidder for part of the chain.  Administrator KPMG had renewed talks with EWM in recent days after a potential £25m deal fell through with Pakistani textile billionaire Alshair Fiyaz, who was thought to be the sole bidder for the chain just last week.

The collapse of Peacocks was the largest retail failure since the demise of Woolworths.

This is a good result for Peacocks although the actual price paid was undisclosed so the return for creditors is not known at this stage.

PAYE Security Deposits

From 6 April 2012 HMRC will be able to ask employers to pay a security where there is serious risk that they won't pay over their PAYE tax deductions or Class 1 National Insurance contributions (NICs).

HMRC have had the power to demand VAT security deposits under paragraph 4(2)(a) of Schedule 11 to the VAT Act 1994. Please see our page on VAT security deposits.

The reasons that HMRC will demand a deposit for PAYE and NIC will no doubt be along the same lines as before with regard to VAT.

For instance;

The director or directors of the new company have had multiple business failures.
The director or directors have failed to comply with tax legislation in the past.
The director or directors have a history of not paying taxes on time.

HMRC are becoming increasingly aggressive towards companies that have been using unpaid tax as a quasi loan from the government.

There is already anecdotal evidence that HMRC have been asking companies to pay deposits against PAYE where the company mainly trades in cash.

What if we don't pay the PAYE deposit?

You must pay it or cease trading. Or if you seek to ignore the demand, it is a criminal offence to continue to trade without providing the required security and HMRC may prosecute if the deposit is not paid upon demand. Under section 37 of the Criminal Justice Act 1991 a magistrate may impose a fine of up to £5,000 for each taxable supply (ie each invoice) made without providing security.

It is probable that in the case of PAYE, this power won't apply until after April 2012. If you have been asked for a deposit specifically for PAYE then we would advise you seek legal advice before continuing to trade.

So if you have difficulty in paying HMRC or are building up arrears of VAT or PAYE then please talk to us - Especially if you are thinking of buying back the business out of administration or liquidation.

Quarter of Small Companies Expect to Fail Says Mail on Sunday

This is a very worrying headline and the statistics showing 25% of people expect their small business to fail is depressing; but not sure how reliable it is. What about telling those 25% of worried directors that there are many tools out there to help their business. The internet is a huge mine of information  and support for struggling directors. Sometimes "a trouble shared is a trouble halved" as they say.

Perhaps I am a cynic but the article should maybe have had some positive options and suggestions. On www.companyrescue.co.uk we have a suite of products and guides that can help struggling companies.

How to ask for time to pay your company tax bill

Worried about cashflow? Get our FREE Excel cashflow model to help run your business safely. Monitor your cash everyday easily.

Need to cut costs? http://www.companyrescue.co.uk/directors-guides-insolvency/cost-cutting-guide Click for 20 great cost cutting tips for your company.

Most importantly don't worry on your own. Get advice from online guides, business clubs, mentors, accountants and turnaround companies. There are often ways to restructure the business that you or your accountants are not aware of, so call us if you need a chat about cashflow, cost problems or just to ask a question.

What is a Personal Liability Notice?

A Personal Liability Notice or PLN can be sent to the "officers of the company" by HMRC if they believe that there has been fraud or serious neglect to pay National Insurance Contributions.  This power came about in 1999 and has been used where HMRC believe they have a good chance of recovering the NIC. 

Please read our page on Personal Liability Notices

Notice of intention to appoint administrators. The first step

When a company is in financial trouble sometimes the first thing we hear about it is that it has filed a "notice of intention to appoint an administrator."  This usually means that it is defending itself against a creditors legal action such as a winding up petition.  Many of the high profile collapses in these last few months have been predicated in this way.  In some instances the business has been sold before an administrator has been appointed.

See our new page on the intention to appoint administrators

Rangers Administration - Missing £24m probed

A sum of £24m was lent to the Rangers by Ticketus which hoped to profit from future ticket sales at the club but, according to the administrators, it now appears that this money cannot as yet be accounted for. The administrators have said that that it is possible that the money was paid to a parent company and so they have not been able to track it through the club’s bank accounts.

The administrators have also stated that it appears that Ticketus does not hold any security over the clubs assets. Ticketus will therefore be an unsecured creditor ranking alongside HMRC who have a £9m claim for arrears of tax and a potential claim of up to £75m which stems from the way Rangers paid their players going back 10 years. This claim is due to be determined by a tribunal.

So what are the options for Rangers and will Ticketus and HMRC get any of their money back? We note with interest that one possibility that is being looked at is for the club to exit the administration by way of a CVA. This will allow the club to continue to operate while paying back a proportion of the debts to unsecured creditors.

A CVA is really the only insolvency process with sufficient flexibility and power to ensure the clubs survival in its current form. However, a CVA will need to be approved by 75% ( by value ) of the unsecured creditors to become binding. Until the exact debt to HMRC is determined then any rescue plan will be put on hold. In the interim, the Administrators will need to ensure that the all of the club’s running costs are met including the payment of tax liabilities. This will be no mean feat given the club’s recent track record. 

Is Rangers too big to fail and would Scottish football be able to survive without Rangers? This is something that even the Scottish First Minister has questioned! 
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