HMRC –Security Deposits on the increase

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Whist it has recently been reported that insolvency figures are rising, and the number of winding-up petitions presented by HMRC are of a significant number (2,385 for the 2023 calendar year), we are seeing an increase in HMRC serving security deposits in respect of PAYE/NIC/VAT liabilities where HMRC believe there is a risk that taxes will not be paid.

These security deposits are requested from the company and can also be requested from the directors of the company personally, with threat of committing a criminal offence if the security payment is not made.

The security deposit requests, along with the presentation of a winding-up petition, are the last resort for HMRC who would much prefer to work with companies to try and recover sums outstanding. It is important therefore if companies are struggling to make good tax liabilities that they contact HMRC  to agree an affordable payment plan.

Should you be struggling to pay not just HMRC but also other creditors in a timely fashion, then please contact PBC Business Recovery & Insolvency  on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk to discuss your available options.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

A Decade of Dedication: Celebrating 10 Years of PBC Business Recovery & Insolvency Ltd

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Today (14th January 2024) marks a significant milestone for PBC Business Recovery & Insolvency Ltd as we proudly celebrate our 10th anniversary! A journey that began a decade ago has been filled with challenges, triumphs, and, most importantly, the unwavering support of our valued team and referral sources.

Reflecting on the past ten years, we can’t help but feel a sense of gratitude for the incredible journey we’ve had. From humble beginnings to where we stand today, it’s been a remarkable adventure shaped by the dedication of our team, the loyalty of our referral sources, and the continuous pursuit of excellence.

Throughout the years, PBC Business Recovery & Insolvency Ltd has evolved and grown, adapting to changing landscapes and embracing innovation. Our commitment to delivering quality service remains steadfast.

We owe our success to the hard work and passion of our team members, whose tireless efforts have propelled us forward. Their commitment to our shared vision has transformed challenges into opportunities and setbacks into lessons that have fuelled our growth.

As we celebrate this milestone, we are filled with excitement for the future. The next decade holds the promise of new accomplishments, deeper connections, and the opportunity to continue serving the business community with the same level of dedication that has defined PBC Business Recovery & Insolvency Ltd.

Thank you for being an integral part of our journey. Here’s to a decade of achievements, and to the exciting adventures that lie ahead. Cheers to ten years of PBC Business Recovery & Insolvency Ltd and to many more to come!

If it sounds too good to be true….

a man and a woman shaking hands

How many of you read the title and finished the saying off?

When companies are under distress, more often than not, so too are its directors.  This can be an area of vulnerability as directors desperately look for solutions.

Unfortunately, this includes social media invitations to “Rid you of your worries,” or “We can extinguish your company debts,” together with similar assurances, all without proper attendance in front of an experienced person.  The directors are told either they pay a fee from their personal savings or, the other approach is an offer to acquire the company shares for a nominal £1 albeit, you have to pay a percentage of the asset value to the “Acquiring” company.  In both cases, the directors are assured the company debts will “Go away” and they can get on with their lives without any more worry.

Subsequent to the liquidator being appointed those who paid a fixed fee soon discover they are being held liable for various claims where it is alleged, they are personally liable and must pay to restore a position.  PBC have been asked to assist directors who have fell victim to this approach and two familiar traits are clear, namely:

  1. The claim is often spurious and has little (if any) chance of being enforced through the courts. 
  2. The approach can feel frightening to the receiving director and any negative response to their approach is met with an insistence a claim exists.

It should be mentioned, claims against directors happen in many insolvency matters.  However, more often than not a director will have been advised from the outset of potential headings for claims and an insolvency practitioner is generally more open to the commercial considerations surrounding a claim and any settlement.

Gary Pettit of PBC added,

“I was appointed liquidator by the Secretary of State over a company that was wound up by the court.  The PBC Team discovered the directors had been in the process of selling the company for £1 whilst also paying £10,000 to the acquiring party.  Who believes that is a good deal?  Unfortunately, this is what desperate people can do.

That planned deal was stopped, the £10,000 recovered and the assets were eventually sold for £180,000 – slightly more than the proposed £10,000!  Had that deal been completed the director could have been held personally liable for the resulting loss.”

The stress on directors of a company in financial difficulties can be high and often lead to making hasty decisions.  Those decisions can often be encouraged by businesses who entice the directors with an escape plan that can lead to the prospect of facing personal liability and potential directors’ disqualification for breaches of duty.  That deal very quickly takes on a different complexion.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Winding up is the solution, right?

Woman sitting at desk using a mouse.

Pay or we will look at winding you up.  This is a threat that many debt collectors and credit controllers use as a means of persuading an errant debtor to pay.  However, at PBC we ask if those threatening such action appreciate the impact of winding up proceedings, both practically and in terms of petition costs that could be in the region of £6-8,000.

Before a petitioner can seek to recover their petition costs as a liquidation expense, the statutory fees must be fully repaid.  These include the official receiver’s fixed administration and general fees of £5,000 and £6,000 respectively.  Equally, the official receiver shall levy a 15% fee on any assets they realise.

In a recent report from the Insolvency Service an average of 10% of all compulsory liquidations over the past 5 years resulted in the official receiver fees being fully covered.  There can be many reasons for this but, ultimately it is suggesting in 90% of compulsory liquidations, the petitioner is writing off the petition costs they have paid out in addition to their original debt. 

There are times where winding up proceedings are justified.  However, a petitioner should also be aware of (and open to) the alternatives that are available.  This maybe creditors voluntary liquidation, where a wider degree of commercial thinking is often employed.  It could also be some form of restructuring that benefits creditors as a whole.  Often, the likes of a company voluntary arrangement will provide to repay the petition costs as an expense while the CVA, itself, offers a better return on your principal debt.

It goes without saying that everyone wishes to be paid for their services or goods supplied.  However, when a company is likely to enter into an insolvency event, reality turns on the question how do I  maximise recovery and does any alternative option being made available achieve that?

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Solvent liquidations – an end to tax clearance

PBC sign
PBC sign

Solvent liquidations - an end to tax clearance


The most frequent appointments insolvency practitioners have had in recent times are as liquidator of solvent liquidations (“MVL”). Most MVL are where a company’s purpose has drawn to a close, having paid all known liabilities, and the balance of funds are distributed to the shareholders.

In the pre-MVL preparations the company accountant will normally obtain tax clearance. Perhaps an anomaly is the MVL liquidator has also needed to obtain tax clearance before concluding the MVL. This requirement has resulted in many MVL being held open for long periods of time.

However, with effect from 6 December 2023 the requirement for tax clearance in MVL has been abolished. In a statement within their guideline, HMRC made it clear:

“Insolvency legislation requires directors to make a sworn declaration of the company’s assets and liabilities, confirming liabilities plus costs and interest can be met in full in the next 12 months. Directors need to be satisfied that the company’s liabilities, including tax liabilities, are stated accurately in order to confidently make this sworn declaration. Liquidators, company financial advisors, directors and shareholders customarily work closely together in MVL cases to ensure the company’s affairs are wound up as efficiently as possible.”

It is clear HMRC shall rely heavily on the accuracy of the declaration of solvency and the penalties available should it prove to be a false declaration. Therefore, any directors considering entering their company into MVL must ensure all potential liabilities are identified and paid (or secured) beforehand.

If you require any advice or assistance on any insolvency or solvent -related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk. Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Pragmatic approach avoids bankruptcy.

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When dealing with formal corporate insolvency appointments, sometimes directors owe funds to the company which, as office holders, we are duty bound to try and recover for the benefit of the company’s creditors.

One recent case being dealt with by our Milton Keynes Office had this very issue, but the director had also provided personal guarantees to company trade creditors totalling circa £300K. One of these trade creditors had also commenced bankruptcy proceedings against the director.  We were appointed liquidator of the company and, following some investigation, explored the prospect of whether an informal ‘full and final settlement’ could be reached in order to avoid bankruptcy and maximise the return to the liquidation and guaranteed creditors. We discussed this with the director and suggested they contact a solicitor who was then able to put the offer to all creditors.

We are pleased to report that all creditors accepted the offer, the settlement funds were received within 7 days and, in avoiding bankruptcy proceedings the director can now move forward.

Should you or a client require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton) or 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.

Director duties reinforced (again!)

It would be wrong to imply HMRC simply agree to TTP upon application. PBC Business recovery and insolvency practitioner

What can appear to be straightforward is sometimes never the case as demonstrated by the numerous questions we get from Directors in respect of their statutory duties. This was recently highlighted on a seminar hosted by Gary Pettit where many questions were raised following a short presentation.

All too often directors can find themselves getting embroiled in the emotion of the situation, particularly where there is a dispute within the board of directors with the issues prevailing over their duties.

The court adopt the view you are a director first and foremost, while personal opinions or conflicts of interest are immaterial.  This has recently been demonstrated in the High Court decision of Jacob Beake and Paul David Allen (Acting As the Joint Administrators of London South West SW Limited) and – (1) Jamie Richard Chapman and (2) Bodman House Management Ltd [2023] EWHC 1986 (Ch).

In this case, the director refused to sign a lease to a property, jeopardising the sale.  It is understood the director tried to use his refusal to sign as leverage against a personal dispute with the administrators of a connected company.  The court took the view this refusal was a breach of duty and was interfering with the duties of an administrator.  As a result, the director was ordered to sign the lease and costs were awarded against the director.

This decision should act, as yet another warning to directors who choose to put their personal issues before their statutory duties, particularly if it results in the interference of the duties carried out by an office holder.  It also serves as a warning for those directors who are embroiled in a management dispute whereby, if you fail in meeting your statutory duties then you must be prepared to face the consequences.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss your situation on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Is the risk of insolvency increasing?

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This morning (31 October) the BBC reported, “The number of firms in “Critical financial distress” jumped by 25% in the last three months.”  Indeed, the number of companies falling under this description was almost 38,000 and is based upon a report that county court judgments (“CCJ”) exceeding £5,000 have increased significantly.

Firstly, some perspective.  There are over 5 million businesses registered in the United Kingdom.  However, that is small consolation if you are one of the 38,000 (or close to becoming one of that number).

A CCJ can be damaging to a business as it effects credit ratings, can impact on the ability to obtain supplies and, sometimes, can be a precursor to corporate failure.  However, you may get a CCJ for several reasons, including:

  • You have lost a legal claim, so judgment was made against you; or
  • There had been an innocent oversight; or
  • You have cash flow issues where you are unable to pay debts as they fall due.

Losing a legal claim can have obvious and direct consequences that may even result in the demise of your business.  However, cash flow issues can be something that creeps up on a business – sales may take a slight dip, that invoice you were expecting to be paid is delayed, or simply not paid at all.  A common issue we are seeing frequently is costs of materials have increased, resulting in a reduced profit margin on a job you are contractually bound to complete.  In business, you can be so focussed in doing the business that you take an eye off the business itself and these operational issues do not get recognised as early as they might.

Just because a company is struggling, it does not automatically mean failure.  As PBC have demonstrated time and again, taking early advice has enabled us to consider the options available and it enhances the prospect of turning your fortunes around.  It should be said that it is rarely too late to take advice.  However, the longer you leave it until you do, generally narrows the options available.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton), 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Provide a helping hand this Christmas

We have teamed together with two other Northamptonshire businesses, AMC IT and CFW Accountants to collect for Kettering foodbank leading up to the Christmas period.

 We all know times are tough for many people and no family should be struggling to feed themselves at any time of the year, let alone Christmas.  It would be amazing if any of our contacts could spend a few more pounds when they do their weekly food shop to purchase some of the items listed.  

These are essential items that are ALWAYS required but there’s no harm in going a step further and adding a treat in if you would like, although the essentials are the most important please. 

All items donated should be dropped off between the hours of 8.30am and 4pm Monday to Friday to either CFW Accountants LLP, 3 Weekley Wood Close, Kettering, NN14 1UQ or to us at PBC Business Recovery & Insolvency, 9/10 Scirocco Close, Moulton Park, Northampton, NN3 6AP.    

Administration saves 170 jobs – It’s what we do.

Following our recent reports about our work in safeguarding businesses, PBC have now successfully ensured the continuation of another business via Administration, where all 170 employees were protected. Had the company entered into liquidation, it would have resulted in all employees being made redundant where the burden on the Government Purse was estimated to have been in excess of £200,000 in respect of the employees’ entitlements.

Ian Cooke from PBC said,

“This is another example of directors seeking early advice and where the PBC Team were able to assess the situation quickly and advise on the most beneficial solution for all stakeholders.”

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton) or 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk