I want to tell you my story

Hands up if you have been in an argument.  What usually happens?  They raise their voice so you raise yours and so on until it becomes a shouting match and the cause of the debate gets pushed aside while other issues come to the fore.  Sound familiar?

Common claims parties say to me in the run up for a mediation include:

• The matter is complicated; or
• Although willing, I am not sure how this can be settled; or
• The other side have been doing something untoward/fraudulent etc.

One of the problems is the longer a dispute is allowed to run the more the core reason for that dispute pales into the background and claims and counterclaims are thrown back and forth.  In shareholder disputes it can get worse as disputing shareholders make allegations of misconduct, then act on those beliefs, forgetting their own statutory duties owed to the company.

So, with the above in mind, how is it that more often than not disputes reach a settlement in mediation?  I read something recently that said,

“The question is not how to avoid conflict but how to do it well.”

As I was once told, we have two ears and one mouth; we have been designed like that for a reason.  All too often in a dispute scenario we forget the core basics of listening and talking by resorting to raising our voices, hoping the one that shouts loudest will win the day.  Unfortunately, all it generally achieves is a steadily increasing legal bill, court intervention and an unwanted distraction to your business.

A mediator re-introduces the core communication attributes back into the forum and it is surprising how getting each party to listen to the story of their opponent extracts the facts, which ultimately leads to reaching a common position.  This usually leads to settlement as the parties get to understand the facts behind the cause of the dispute from their opponents’ point of view.

Refusal to mediate or, simply agree to mediation so you can “Tick the alternative dispute resolution box” can be dangerous territory.  If a court take the view you could have avoided court intervention by settling through mediation you may be at serious risk to an adverse costs order as many have already discovered to their cost.  Therefore, if there appears to be a chance of settling a dispute you should consider mediation at the earliest practicable date.

Should you have an insolvency-related issue or a corporate dispute then please contact Gary Pettit at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to garypettit@pbcbusinessrecovery.co.uk or access our website at www.pbcbusinessrecovery.co.uk

Someone once told me, “I enjoy paying tax because, if I am paying tax then I must be earning money”.

In fairness, most people would agree with the above.  Unfortunately, there has been a long-running battle for HM Revenue & Customs in catching up with those who see it differently.

The Government are planning to introduce policies within the Finance Act 2019-20 that proposes to make directors personally liable for company tax liabilities where the following five conditions are met:

1. Where a company that is subject to an insolvency procedure or there is a serious risk that it will be;
2. The company has engaged in tax avoidance or evasion;
3. The person responsible for the company’s conduct enabled or facilitated it, or benefitted from it;
4. There is likely to be a tax liability arising from the avoidance or evasion;
5. There is a serious possibility some or all of that liability will not be paid.

The objective of these policies is aimed at those:

• Who try to exploit the insolvency procedure to avoid or evade taxes and/or payment of taxes and duties;
• Repeatedly accumulate tax debts without payment by running them through a succession of corporate vehicles which are made insolvent;
• Try to sidestep penalties for facilitating avoidance and evasion by going insolvent.

Based upon the five conditions, you can see the policies are aimed at those who act in a deliberate manner of tax avoidance/evasion.  It is not aimed at those who have (say) missed the payment deadline for last month’s PAYE prior to entering into an insolvency procedure or, your overall circumstances demonstrate, as a director, you have acted honestly and fairly to creditors as a whole.

While many have criticised the proposed policies, HMRC have already been increasing investigation activity and a freedom of information request revealed in the 2018/19 accounts an additional £34.1 billion was generated from tackling tax avoidance, evasion or, simple non-compliance.  The first 3 months of 2019, alone, has seen these investigations recover more than £20 million.

The key message that should be derived from the proposed policies is if you feel there is an increasing difficulty in managing the company tax affairs then seek early advice.  HMRC are generally understanding where they learn of a possible issue at an early stage and it is better to engage with them early rather than wait until enforcement procedures commence.

Should you have an insolvency-related issue or a corporate dispute then please contact Gary Pettit at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to garypettit@pbcbusinessrecovery.co.uk or access our website at www.pbcbusinessrecovery.co.uk