Collaborating for Success

PBC Business Recovery & Insolvency are dealing with the Administration of the UK subsidiary of a very well-known coach company that was based in Belgium.  Apart from the usual office furniture and equipment, together with plant and machinery, the company owned its freehold trade premises.

The chattels all sold for the higher end of valuations, but the highlight was the premises.  Agents had valued the premises with instructions to give serious consideration to offers in excess of the minimum expectation. As a result of a short marketing campaign, the agents received several offers but rather than simply accept the highest offer, the interested parties were placed on notice to submit their best and final bid.  The result was the property was sold for nearly twice as much as expected.  This will mean a return will be paid to unsecured creditors, more than double what was originally envisaged.

You cannot substitute experience, and the outcome of this property sale was the result of the vast experience at PBC, working alongside Wilson Browne Solicitors and Lambert Smith Hampton, who should be recognised for their part in this success. 

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Former liquidator imprisoned

Many readers may take some pleasure at reading the headline, which relates to an Australian Insolvency Practitioner (“IP”) who was found guilty of extracting over AUS$2.5 million from insolvency estates.

Whilst that IP will have plenty of time to reflect on his wrongdoing, the estates should not lose out as a regulated IP must take out a specific insurance bond, to the value of the anticipated assets in that estate, on every appointment.  This serves to protect the creditors from any financial wrongdoing by the IP or their staff.

Unfortunately, there are unregulated advisors who prey on the vulnerable making big assurances such “Use us and we help all of your financial worries go away”.  They will offer you something like:

  • You can resign as a director.
  • We shall acquire the shares.
  • Everything will be sorted, meaning you can get on with your life.

PBC have previously advised directors of the dangers of trying to “Cut corners” and use an unregulated advisor, yet those warnings do occasionally go unheeded at considerable personal risk to the directors.

On 29 July 2024 Save Consultants Limited was subject to a public interest winding up order.  This company worked alongside Davis Acquisitions Limited who were appointed as director of 78 companies.  The Insolvency Service stated Davis Acquisitions was used as the vehicle to, “Avoid formal insolvency procedures, asset recovery and director conduct scrutiny.”

Unlike the situation with the wayward Australian IP, these companies are not subject to the specific insurance requirements and, as such, the creditors will suffer greater loss.  However, the likely issue surrounding those 78 companies will be a formal winding up of each company, followed by commencement of legal proceedings for a breach of duties, which could lead to personal liability and even director disqualification for those directors who believed using an unregulated advisor was the “Easy” way to out.

Financial difficulties can often be an unpleasant and stressful experience for anyone, so it can be attractive to hear someone promising to take all of your problems away.  However, as the saying goes, “If it sounds too good to be true then it often is,” could not be closer to the truth when discussing the highly specialised area of insolvency, where, to avoid any repercussions, demands appropriate and regulated specialist advice.

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Insolvency as a job – It can be a thankless task.

Everyone wants a pop at someone and that someone ends up being us at times. 

  • Landlords losing a tenant or with rent arrears
  • Creditors being owed money
  • Director/shareholder disputes
  • Employees losing their jobs

We’ve had creditors turn up with big burly men and threatening behaviour, verbal and written insults. Every man and his dog thinks that because a company has gone bust there must have been some wrong-doing which we absolutely must investigate. Albeit that is very rarely the case, in the few instances we do have to take legal action and lift the corporate veil, we then hear ‘you didn’t tell us that’ or something else, quite often insulting the person having given the advice. 

If we know about it, we will tell you if it’s right or wrong.  Even if there is an action, we report it to the Insolvency Service, but it rarely results in director disqualification.  We can only pursue someone financially if they have anything to pursue and if it’s cost effective.  However, if we don’t do so, that’s our fault too, even though we are an independent 3rd party who was not involved whatsoever in running that business.   Often, we are accused of being in cahoots with the directors, just because they came to us for advice and we are helping them with their statutory duties, along with relieving them of some pressure at the same time. 

We work in a very complex profession whereby the ‘entity’ we are acting for changes throughout, initially advising directors or individuals of their responsibilities and guiding them through the process before being formally appointed and then having a statutory duty to act for the creditors.  Despite all of these,  we remain in insolvency because we believe there is a value in what we do. 

The insolvency process is beneficial although it’s a hard sell at a networking event, we can’t often offer much in return but may help you keep a client, ensure employees get paid, release directors from a lease enabling the premises be let to a more reliable business, put some money back into the public purse, return funds to unsecured creditors in quite a few occasions, relieve some pressure from business owners that simply need guidance so they don’t fall fowl and become one of those few above that do become personally liable. 

We often provide enough support that our formal services are not needed.

Who knows – you may actually see the positives in what we can offer….. 

By Claire Goodacre 

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Settling a Director Loan Account – A potential tax exposure?

Settling a Director Loan Account - Potential Tax Exposure?

It has become an increasing situation to discover adverse director loan accounts (”DLA”) showing on the balance sheet of companies that are in financial difficulties.  All too often a director is left with a financial burden that requires settlement, whether that is in part or in full, paid by way of lump sum or over a period of time. 

Where it is part settlement, is the unpaid balance of that DLA deemed to have been written off or are you simply released from that liability?

That was the question the tribunal judge had to consider in the First Tier Tribunal of The Commissioners for his Majesty’s Revenue and Customs versus Gary Quillan.  The issue arose after Mr Quillan paid £57,000 to the liquidator of his company, leaving an unpaid balance of £382,456.  HMRC decided to levy a tax charge against Mr Quillan under section 415 Income Tax (Trading and Other Income) Act 2005 that permits the assessment against any adverse DLA which is either written off or released (from being pursued).  HMRC lost the appeal as the tribunal determined the DLA balance had not been written off nor released, merely left unpaid and available to pursue should the financial circumstances of Mr Quillan significantly improve at some later time in life, subject to the provisions of the Limitations Act.

Where an adverse DLA is concerned, if a director is incapable of repaying in full, paying a settlement in full and final satisfaction, it may expose that director to a section 415 tax assessment.  But, in leaving the matter “Open” the risk carried is they could be subsequently pursued for the unpaid element at some later stage, presumably within the 6 years limitation period?

When faced with a company that has an adverse DLA, PBC look to work with the director to review the construction of the DLA to ensure the balance is a genuine personal liability.  All too often we find the DLA includes genuine business expenses and often makes no allowance for setting off monies owed to that director.  Indeed, in a recent instruction, PBC were able to successfully defeat a DLA recovery claim by litigation funders (acting for a liquidator) by exercising a similar review.  Unlike that recent instruction, while a review may not extinguish the balance owed, it can often assist the director in reaching an agreement for repayment and in a manner that could minimise the threat of a tax assessment landing on the doorstep at a later date.

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Debt Awareness Week

This week is debt awareness week, and it is reported that a third of all businesses are experiencing debt issues which will likely increase over the coming months for several reasons, including various tax increases.

Nicole Anderson states “If the above resonates with you or, one of your clients,  it is important advice is sought as soon as possible. At PBC Business Recovery & Insolvency, we do not consider debt as a sign of failure. In fact, it is quite the opposite, we applaud those that give business a go, but bumps in the road are part of life – it is how you get over these bumps which is important”

Should there be a need for advice surrounding your debt problems and options available, please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

THANK YOU

Who doesn’t appreciate a simple thank you message?

Reaching out to Insolvency Practitioners for advice can be daunting. It is not until a person, or a company director takes that leap that they realise we are here to try and help. Below are three emails received in the last week which we really appreciate.

Individual with personal debt problems:

“Morning

I’ve submitted my application for bankruptcy. Whatever happens, just wanted to say ‘thank you’. Will always be thankful and appreciative”

Individual looking to take over the running of a company from the current director and avoid a formal insolvency event:

“Hi

Hope you are well

I just wanted to say thank you so much for meeting with me and the company director to discuss matters. Your time was invaluable to us moving forward with any decisions. THANK YOU!”

The closing process made clear and easy for a shareholder to understand:

“I attach the signed consent to early conclusion as requested.

Thank you to all of you, especially Gary, Marli and Nicole, for dealing with the liquidation so smoothly.”

If you need advice, don’t leave it too late to speak to us.  We are all very nice, honest!

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Members’ Voluntary Liquidations – 7 Week Countdown!

Given the recent changes on the rate of CGT that applies to Business Asset Disposal Relief on the lifetime allowance of £1Million, the clock is ticking to benefit from the current rate of 10% until 5 April 2025 on capital distributions. From this date it will rise to 14% and then 18% in  April 2026

The above could be a significant tax saving for you or your clients and, if this is being considered, the time to start acting and planning is now.

Should you wish to discuss a Members’ Voluntary Liquidation further then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk.

HMRC ramping up winding-up action

It has recently been reported that HMRC appear to be ramping up the number of winding-up petitions being presented to the court. Figures published in the London Gazette for January 2025 indicate HMRC issued 480 petitions, compared to 327 presented by HMRC in January 2024.

The presentation of a petition is, generally,  the very last resort for HMRC and the recipient would have had significant correspondence with HMRC beforehand an attempt to recover the debt in an orderly manner.  If you or your client are facing the very real threat from HMRC of a winding up petition, it is imperative swift advice is sought to look at alternative options of recovery and saving the business.  

In our opinion, the hardest part for most business owners when financial trouble is imminent, is making that first contact and seeking assistance.  Here at PBC Business Recovery & Insolvency we understand this, but the sooner we are contacted, the greater the options available to you.

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Buy something for your money!

It is always pleasing when we advise company directors early on.  Especially when there is likely to be a bump in the road in respect of the company’s finances.   This provides directors with significant options to avoid a formal insolvency procedure.

Some of the time, the directors, believing in the company’s future, are looking to place their own funds into the company to ease the financial pressures. If they believe in the company and have the available funds, then this all makes sense.

Now, let’s say the bump in the road is too great to overcome, the directors have ploughed funds into the company, and it enters an insolvency event.  The directors will sit at the bottom of a pile as there are creditors that sit above them in the waterfall of recipients in insolvency should a dividend be paid. These are namely employee wage arrears, holiday pay and HMRC in respect of their secondary preferential status, and then secured creditors such as banks etc.

To cut a long story short, if you are a director or you have a client that is looking to shore up company finances by loaning the company funds, if the company has assets, then look to secure funds invested by buying company assets.  Make sure market value is paid and document the transaction. If the worst then happens, funds invested are not sitting at the bottom of a pile.  

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Is it a reasonable request?

How often has one of your clients entered into an insolvency event while owing you money?  If that is not bad enough, you then get the insolvency practitioner appointed (“IP”) demanding that you provide swathes of information and documents, at your expense.

Some IPs will inform you of your duty under section 234 Insolvency Act 1986 to deliver up the information sought and, most likely, failure to comply may lead to a court application.  Indeed, if they really wanted to get heavy they could point out the court ruled, in 2014, that you have a public duty to deliver up, irrespective of the cost to you.

The question is whether you should allow salt to be rubbed in by suffering more expense in addition to the unpaid fees you have already suffered.

What an IP will not be in a hurry to inform you is the requests for delivery up of records has to be justified and reasonable.  In a recent court case, in throwing the liquidators’ application out, the court said,

“any application for delivery of documents under the IA 86 should clearly explain why such documents are “reasonably required” and should not be unduly broad or burdensome to carry out.”

Indeed, we have seen sight of an information request with standard requests together with the following:

“Copies of any emails between you and the Company, including its officers.”  At PBC, we question if this request is reasonably required given the arduous task of collating this information, not least GDPR concerns, as some emails may not just deal with company matters but also, personal affairs of company officers.

So, if you are the recipient of a delivery up request from an IP, ask yourself is it a reasonable and justified request?  If in doubt then reply to the IP and ask for their reasoning behind the request.

If you need any advice or assistance on any corporate restructuring or insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 033150 (Milton Keynes), 01234 989150 (Bedford) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.