Recently, PBC took on a compulsory liquidation where there were no known assets, other than an adverse director loan and that director now lives in Dubai.
After enquiries were made into the company finances, we wrote to the director and explained how much was payable, having taken account of his employment rights and other sums he was owed. The director was offered the opportunity to repay the loan immediately or payable over time, although the latter option would include costs and interest charges. No threats, just a civil communication.
That civil, open and honest communication ultimately led to the director fully repaying the loan account amounting to over £400,000, which has resulted in PBC now preparing to pay all known liabilities in full, together with statutory interest.
This excellent result further demonstrates the experience at PBC where a civilised and transparent dialogue with the director concerned resulted in the perfect outcome for all.
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.
The rate of CGT that applies to Business Asset Disposal Relief on the lifetime allowance of £1Million is currently 14% until 5 April 2026. After this date it will rise to 18%.
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.
In business, companies will enter into contracts or trade agreements with suppliers and customers by a matter of choice. However, H M Revenue & Customs (“HMRC”) have no choice. They are an involuntary creditor who must engage in tax compliance relationships.
The current business climate indicates cash flow remains one of the main threats to company survival and, at PBC, we hear claims that because HMRC are not providing that urgent supply or service required, payment of the taxes is not given any priority. Given that HMRC have more (and expedient) powers of enforcement and recovery than most suppliers, this is wrong.
In two recent reported cases, HMRC:
Continued with their petition, notwithstanding the company in question had already entered into voluntary liquidation. The company was wound up by the court on the basis intense investigations were needed surrounding tax evasion and, in the interests of creditors as a whole the compulsory liquidation was more justified than a voluntary liquidation.
Exercised their powers to have a company wound up in the public interest. This was a company that promoted debt avoidance schemes and the court agreed the operation was detrimental to the taxpayer and the winding up made.
Certainly, at PBC we have noticed a significant uplift in enforcement activity by HMRC and PBC are administering the liquidations of several where there has been tax avoidance or evasion. These cases can lead to personal liability against directors.
HMRC officers are currently more proactive, seeking to attach HMRC debt to company assets, which could ultimately result in that company being so disabled, it is forced to cease trading. Generally, HMRC will give you a lot of warnings but, all too often, these warnings are ignored until that warning becomes an enforcement action.
As mentioned, HMRC are not “Trading” with a company. They do not have that trading relationship but they do have a duty to maximise tax receipts. Ignoring their threats is misconceived because HMRC will carry out those recovery threats if needed. However, we find they are willing to being open and candid in a continuous dialogue with them which can often result in a manageable way forward.
If you are struggling with tax liabilities and need any advice or assistance, or 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.
“My company is failing but there remains a viable core business that I want to save.” At PBC we are hearing this scenario on an increasingly regular basis
There are recovery options available to companies that are suffering from cashflow difficulties, such as a company voluntary arrangement. Unfortunately, circumstances may dictate the only viable option is to acquire the business from the company and start afresh. The most regularly used procedures for this are a pre-pack administration or simply acquiring the business from the appointed liquidator. However, the overall circumstances dictate which is the more appropriate option in the circumstances.
A difficulty with looking to re-start trading with a new company can be the name and/or brand. Section 216 Insolvency Act 1986 (“The Act”) states that the name of a company that is in an insolvent liquidation becomes a prohibited name. Directors have suggested looking at a pre-pack administration avoids this restriction. However, it is often the case an administration will exit into liquidation and accordingly, trigger Section 216 of the Act.
The provision relates to a name that is so similar that it may cause confusion to the public. It also includes a trading name or a simple use of initials. In the case of Re: Johnsons Electrical & Mechanical Services Limited (in liquidation) the court determined naming the acquiring company, “JEM (Group) Limited” was the re-use of a prohibited name, despite the director claiming “JEM” was part of his name – Jeremy.
There are exceptional rules to argue against the allegations of a breach to this provision and a director should always seek independent legal advice on the re-use of a prohibited name. More importantly, directors should ensure the steps required are strictly followed because the courts adopt a no tolerance stance towards the failure to follow correct procedures. As a warning, the penalty for getting this wrong has been demonstrated in the Johnson case where the director was held personally liable for the debts owed to the (2) claimant companies, resulting in his personal bankruptcy.
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.
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.
Are you looking to retire, close your company down and extract the surplus funds as a dividend against your shares? This is where tax planning and a formal winding up of the business affairs via a members voluntary liquidation (“MVL”) come into the equation.
A MVL is a solvent winding up that, given certain criteria, enables the shareholders to claim business asset disposable relief and reduce the capital gains tax to (currently) 14%. This is to increase to 18% in April 2026. However, there is some uncertainty whether the available capital gains tax rates will remain, given the Autumn statement will be on 26 November 2025 and representations being made by the Government with regards to taxation generally.
Arguably the most fundamental part of a MVL is swearing the declaration of solvency. This includes a statement from the directors whereby they declare all known company creditors shall be paid in full, together with statutory interest within a period not exceeding 12 months.
Where properly pre-planned, by the time you are ready to commence the MVL procedures, all liabilities have already been paid and it is a “Clean” state of affairs, requiring the distribution to shareholders. However, what if you have a potential debt hanging over the company? It is a liability the directors say is not owing, yet it could end up being a court matter and is likely to remain unresolved within the 12-month period. What do you do?
Ordinarily, it would be reasonable to suggest a provision is made against that prospective liability so, if the company lose the argument or reach a settlement, the funds are there to cover the liability. However, the recent High Court decision of Noal SCSP & Ors v Novalpina Capital LLP & Ors [2025] EWHC 1392 suggests if all debts are not paid within the specified 12 months the liquidator should be looking to convert the MVL into an insolvent liquidation. That gives rise to investigations, including whether it was reasonable to swear the declaration of solvency in the first place.
The above decision is subject to appeal, but the key message, here, is plan thoroughly and consider all possible issues before commencing the MVL itself. This is where PBC can assist you when approached at an early stage.
If you need any advice or assistance on any MVL, 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.
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.
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.
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.
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.
