This small company had grown quickly in 2 years from 0 to £600,000 sales. The management had not focused hard on margins but more on turnover (the old maxim turnover is vanity, profit is sanity had not been recognised). However, they had brought in their accountants who put together a crisis plan.
The directors approached KSA via this website and asked for help. The bailiff had visited from PAYE and the VAT office were threatening to wind the company up. PAYE and VAT had not been paid for 7 months! There were few other creditors but 43 employees.
A CVA was proposed that pays £750 per month in year 1 and rising to 50% of future profits (after tax). This flexible approach is a hallmark of our CVAs many insolvency firms insist on fast and high repayments to creditors in a CVA to get the CVA approved this is abject nonsense!
Any sensible deal can be proposed and if the creditors agree, it is an effective way of protecting the company whilst building profits. Could this work for you?
The tax agents agreed the CVA and actually suggested modifying it to include monthly VAT payments to ease cashflow. So the Crown was very helpful because a sensible deal was proposed and the help that KSA was proposing to provide to the directors (hands on management accountancy work, marketing and a non-executive director for guidance) gave them confidence that the company trading through a CVA was better than a voluntary liquidation.
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