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Latest companies that have entered a CVA

Our website at http://www.company-voluntary-arrangements.co.uk/news/  has been updated with all the most recent companies that have entered into a company voluntary arrangement.

These companies are now trading, and in the control of the directors, rather than going into administration or liquidation.  This website aims to raise the profile of this excellent rescue mechanism that is under used in the UK and particularly in Scotland.

HMRC claims £24.9 billion from tax avoidance

Up £3.2 billion from last year, HMRC have collected in a record amount of unpaid tax, with more than £8 billion taken in from large businesses alone.

Serious about its commitment to tax payers, HMRC have met the Treasury’s targets on tackling tax avoidance and have ensured certain loopholes involving corporation tax and stamp duty land tax have been stopped.

HMRC received criticism last year from MP’s claiming it hasn't used all of its powers to collect unpaid taxes. Since then the government department have made sure results and targets are met and properly publicised.

HMRC’s facts and findings have been released along with the report ‘HMRC fast facts: record revenues for the UK’ – this details their overall strategies and future plans for dealing with tax avoidance.

It’s no surprise HMRC are tackling large businesses that are deliberately avoiding taxes, rather than focusing on businesses that are struggling and are having problems paying.

What is a CVA and how can it rescue your business?

A company voluntary arrangement (CVA) can help restructure a business that is struggling with debt and cashflow. Many directors don't know this powerful rescue tool exists and the company often goes down the administration or liquidation route.

Not only will a CVA ensure directors keep control of the business, the company can continue trading as normal. Check out our blog on the benefits of a CVA and how it can help a struggling business.

Director banned after failing to pay business tax

Director of Smiths Storage (UK) and Miami Storage Limited, Warren Smith, has been disqualified for five years after not paying business taxes to HMRC and Leeds City Council for over a year.

The two storage companies went into liquidation in June 2011 and February 2012 respectively. The Insolvency Service found the companies to owe £177,000 to HMRC and £424,000 to HMRC. The total amount owed to creditors was over £738,000.

Failing to pay business tax, VAT and PAYE can lead to serious consequences if not dealt with quickly. The company can be issued with legal actions, like winding up petitions, which can seriously damage the company's reputation. Directors can also be made personally liable and even disqualified, as the case above shows.

If you are falling behind with VAT, PAYE or business taxes, the best thing you can do is to act quickly before it's too late. Call us on 0800 9700539 and speak to one of our corporate advisors - they will look at all available options for your specific situation.

Pharmacy Plus has entered administration

The Bristol-based pharmacy company went into administration on Monday (19th May). See our news page for more details.

If you are an employee of Pharmacy Plus, our video on employee rights in insolvency may be of help:

Is your company insolvent?

Do you know if your company is solvent or insolvent?

Some warning signs are harder to spot that others, so it's best to look at all areas of the business to ensure you're prepared if things start to get out of control.

Use these three tests:

Cashflow test - can the business pay debts when they fall due? VAT, PAYE, corporation tax etc...

Balance sheet test -  Does the business owe more than it actually owns? Do liabilities outweigh assets?

Legal action test - Have you been issued or threatened with legal actions, like a Winding up Petition, CCJs or distraint?

If any of the above apply to your business, it's likely that it is insolvent. You must act quickly to avoid the situation getting worse but don't panic, there are ways to turn your business around. For example, a Time to Pay deal with HMRC or a Company Voluntary Arrangement may be the best solution.

If you have been issued with serious legal actions, administration can safe-guard the business. You may want potential buyers and those looking to provide investment to purchase the business and assets while in administration too.

Whatever your situation, be aware of the facts and act quickly to minimise risk and personal liability. If you believe your company is insolvent, you can call us on 0800 9700539 for expert advice on turnaround and insolvency solutions.

Paul Simon administration: all remaining stores to close

We recently blogged about a number of Paul Simon stores closing while seven stores were bought by Lewis Home Retail. The furniture retailer has suffered from ongoing difficult market conditions, falling sales and expensive leases.

The business and the remaining 22 stores were put up for sale as a going concern. Unfortunately, no suitable buyers have come forward and as a result, all stores will be closing and 209 employees are to be made redundant. These stores will close over the next three weeks:

Watford, Croydon, Farnborough, Byfleet, Southampton, Milton Keynes, Crawley, Colchester, Ipswich, Norwich, Peterborough, Basildon, Catford, Chadwell Heath, Fareham, Northampton, Swindon, Orpington, Rayleigh, Stevenage, Aylesbury and Aylesford.

Joint administrator from Deloitte, Lee Manning, stated, "We very much regret that a buyer for the remaining stores as a going concern could not be found. We will close stores over the coming weeks, selling the remaining unsold stock in these stores in clearance sales. The business cannot trade indefinitely without the prospect of a buyer".

If you are a customer with queries about orders or purchases, contact 0207 007 3200 or email paulsimoncustomers@deloitte.co.uk.

We are not involved in the administration and questions should be directed to Deloitte who are handling the administration.

If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.

Exiting administration via Company Voluntary Arrangement (CVA)

Companies can go into administration followed by a CVA as a way of protecting the business. If legal actions are being threatened, there is usually little time to prepare a successful CVA. Entering administration ensures the business is safe-guarded and allows the administrators and business more time to get things in order.

Once the company goes into a CVA, the directors will be given back control of the company and a debt repayment plan can be put in place. A company voluntary arrangement is usually a better outcome for creditors in the long run, than say administration or liquidation.

Directors of insolvent businesses must act properly and legally

As a director, you may have been trading profitably for many years and have always paid your bills on time. However, when the company gets into cashflow difficulties, as a director you need to make changes to the way you act. If the business is insolvent, then you have a legal obligation to do so.

Common mistakes that distressed company directors make are:

- Trading whilst insolvent which is simply carrying on trading when the business has no chance of paying creditors
- Creating preferences (paying one creditor over another )
- 'Transactions at an undervalue' (selling assets of the insolvent company to another company at a knock down price)
- Wrongful trading (this is like trading whilst insolvent except that you do it knowingly or even fraudulently)
- Failing to submit tax returns and tax payments

The best thing you can do is get advice quickly. The sooner you seek advice, the better chance you have of avoiding wrongful trading and personal liability.

Remember that if your company is insolvent, you have a legal duty to maximise creditors' interests.

Printer of colour books, Butler Tanner and Dennis Limited, is in administration

The Somerset-based printing and binding firm has entered administration due to a drop in trading and difficult market conditions. The firm’s lease also ended last year and the company has been unable to find suitable alternative premises.

Trading under Butler Tanner and Dennis Holdings Ltd, the printing firm specialises in high-quality colour books, Fine Art prints, magazines and literature projects. 100 jobs are at risk after the directors made the announcement to staff at the site in Frome yesterday (13th May).

CEO, Gerald White, commented “After spending months considering the future of the business, various lease options for our existing site and searching for alternative appropriate premises from which to print, we have unfortunately been left with no option but to put Butler Tanner and Dennis Ltd into administration. We very much regret the impact this will have on our loyal staff and customers and the community of Frome.”

Administrators, Thornton Rones, are expected to be appointed next week.

Two other companies operating under BT&D Holdings Ltd, Butler Tanner and Dennis Maps Ltd and Berforts Information Press Ltd are not involved in the administration.

If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an insolvent business. There is a link at the end of the video to the Government website which expands further on what you need to know. Please note we are not involved in the administration.

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