Are you getting the right advice?

2 men in an office

A recent news article claimed that business insolvencies were the highest since 1993.

As usual with the media, this report cited the overall numbers and proceeded to break them down into their individual insolvency types. However, at PBC we question how meaningful the breakdown is to the readers.

The fact is, for most companies there are no less than 8 differing formal options available under the Insolvency Act and (following COVID) The Corporate Insolvency & Governance Act. Add the other procedures available for special circumstances and the range of insolvency options increases still further.

Sometimes the option is clear. For example, if a company is solvent and the directors are looking at a solvent wind down (usually for a tax efficient way forward) then you are looking at a member’s voluntary liquidation. However, regularly PBC find the circumstances surrounding a company lend themselves to a wider choice of the options. This is where understanding the business, itself and the issues confronting the company, together with directors’ preference determine the right way forward.

At PBC, we pride ourselves in advising the Directors of the right option for the company. We explain each insolvency type and the reasons why (or why not) that option ought to be considered. Naturally, there are occasions where it is news the directors do not wish to hear (or were not looking forward to their views being confirmed) but often, the advice provided comes as a huge relief and aids removing that “Sword of Damocles” that has been causing stress and sleepless nights.

As Gary Pettit says,

“I have been in this industry for almost 35 years and throughout that extensive career, have often heard directors ask how to place their company into receivership or they need to, “Do a pre-pack”. When I ask them for their understanding, I am met with a blank look as they admit to hearing about that procedure or, a friend told them that is what they must do. It is understandable because insolvency is a highly specialised area with plenty of “Minefields” just waiting for a director to get something wrong. That is where PBC take pride in guiding those directors into adopting the correct way forward, based upon the surrounding issues and circumstance.”

If you need 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.

Celebrating 20 years at PBC

Natasha Pink our insolvency manager in her Arsenal top.

This month our Insolvency Manager Natasha Pink celebrates 20 years at PBC! 

Many of you will be aware that Natasha joined the original Marshman Price business before it became PBC Business Recovery & Insolvency Ltd in 2014.

When she started working as a junior in 2004 a litre of petrol cost 80p, a loaf of bread was 62p and Arsenal won the premier league unbeaten (she is an avid Arsenal supporter).

Congratulations Natasha, we look forward to the next 20 years!

HMRC –Security Deposits on the increase

Woman sitting at desk using a mouse.

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.

It’s Not My Fault!

What is your understanding about being a director of a company?

It is proven time and again that people are unaware of their duties and seem to adopt the idea being a director is merely a title, not much different from that of manager or supervisor.  Nothing could be further from the truth as, unlike those titles, a director has statutory duties to:

  • Act within their powers.
  • Promote the success of the company.
  • Exercise independent judgment.
  • Exercise reasonable care, skill and diligence.
  • Avoid conflicts of interest.
  • Not accept benefits from third parties.
  • Declare any personal interests in proposed or existing transactions or arrangement with the company.

Where a company is insolvent (or likely to become insolvent) the court takes the view that if you fail to meet your duties to protect the interests of the company creditors as a whole then, by default, you accept the consequences of your actions.  Ignorance is no defence. 

These duties can challenge the integrity of a director, particularly when times are tough and you wish to “Look after” certain creditors, for example. 

But, what about when you believe a fellow director is acting in breach of these duties?  Where does that leave you? 

As insolvency practitioners we are seeing an increase in management disputes where one director rolls out a list of failings or perceived breaches undertaken by their fellow director(s).  The key issue with acknowledging the failings of others is just that; you are aware your fellow director may be breaching their duties.  Again, the court has said, “If you are aware a director is in breach of their duties and you are not seen to actively challenge that conduct, then, by default, you assent to it and accordingly, are equally liable for any losses the company suffers.”

While the court’s view may seem harsh, it emphasises the level of responsibility resting on a director’s  shoulders and the fact a director owes a duty to the company and not to any other director or shareholder. 

Should you believe a fellow director is breaching their duties then you must demonstrate you have challenged their conduct.  Keep a written record of your concerns, including any correspondence (such as emails) between you.  If appropriate, convene a meeting of directors as a possible means to discuss the issue and resolve how to remedy the position.  If all fails, seek early independent advice to consider how to protect your position.  Doing  nothing could prove costly.

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.

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

PBC sign

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.

2 men sitting in office in conversation

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.