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For help call 0300 303 8284

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  string(2143) "Over the course of the last year the number of winding up petitions sought by HMRC has increased by 21%. In fact they are at 5 year high.  Ben Cowgill from Bolton Insolvency Experts gives more detail.

The business finance website Funding Options assessed that there were a total of 4,710 winding up petitions filed by the UK’s main tax-gathering body in the 12 months to 31 December 2017. This compares with 3,906 for the previous year and 3,485 for 2015, with winding up petitions being the means through which HMRC aims to put companies out of business in order to recover tax amounts it is owed.

Winding up petitions can swiftly lead to companies being shut down and their assets liquidated on the basis of court orders enabling HMRC to raise funds to settle outstanding debts.

The recent increases in the number of winding up petitions being filed by HMRC are seen as an indication that a growing number of small businesses across the UK are struggling to meet their VAT and corporation tax bills.

A significant cause of this rising inability among small businesses to settle their tax debts is the problem of endemic late payments by bigger customers.

Because VAT is calculated and billed on the basis of amounts that businesses invoice customers, rather when they are paid, there is scope for significant, damaging shortfalls when invoices go unpaid for long periods.

Another potential problem for some small businesses is that they are now no longer permitted to make payments to HMRC by credit card, payment by which has sometimes provided them with useful breathing space.

If your businesses is behind on its tax bills then it is probable that it will already be on HMRC's radar. We can help you explore finance options for your business before HMRC comes knocking on your door. 

Whatever worries you have about your financially distressed company contact our team at Bolton Insolvency Experts now on 0300 303 8284 or via our contact us page.
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HMRC Winding Up Petition Rates at a 5 year High

Ben Cowgill - April 6, 2018

Over the course of the last year the number of winding up petitions sought by HMRC has increased by 21%. In fact they are at 5 year high. Ben Cowgill from Bolton Insolvency Experts gives more detail. The business finance website Funding Options assessed that there were a total of 4,710 winding up petitions filed […]

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  string(3269) "Enforcement officers, also known as bailiffs can be appointed by a creditor to recover the money which is owed to them. Nick Brierley at Bolton Insolvency Experts explains your rights and what legal powers a Bailiff wields.

If the business is not able to pay the debt in full, then the bailiff is entitled to take control of goods to sell in order to recover the money for the creditor. However, they must have the correct authorisation, for example a Writ of Control or a Warrant of Execution. The bailiff is allowed to take control of items which will raise enough money to cover the debt and any interest, plus the bailiff’s fees. The items will usually be sold at auction.

The bailiff may not take your goods away at the first visit. Their job is to ensure you pay your debt. It’s far easier for them if you simply settle the debt, whether that be in full or in instalments, rather than them taking your goods and them having to sell them. On a first visit, they may inspect your home or premises and draw up a list of assets that they believe at auction will cover the value of the debt. They can also include items that are outside your home or work premises which belong to you or the business. The items on this list will then become controlled goods, meaning you can’t sell them, remove them or give them away. Rather than taking the controlled goods away, the bailiff may secure them at your property or you may be able to carry on using them whilst you pay off the debt under a Controlled Goods Agreement. But, if you miss any payments, they can come back and remove those goods. 

There are regulations governing what a bailiff can and cannot take from your home or work place. For sole traders, business debts are treated the same as personal debts. From your home, bailiffs can take any items that belong to you, any jointly-owned items, cash, cheques, or other monetary items you may have. They are prevented from taking any items which are leased or on hire-purchase or any items that belong to somebody else or a child. There are exemptions which include anything considered essential for domestic needs, such as a cooker, washing machine or furniture. They can however take non-essential items such as a dishwasher or a games console. Items used personally for either work, study or education, for example books, tools, computers are also exempt - to a value of £1350. 

For a limited company, a bailiff can only take items that belong to the company, and not goods that are leased or on hire-purchase. As a limited company is a separate legal entity, a director won’t be pursued personally unless they have signed personal guarantees. Bailiffs can take money, stock, office equipment or machinery. This can be extremely damaging for a company and could force them out of business, so if you receive notice from a bailiff, it is important to act quickly to either settle the debt or seek professional advice.

At The Insolvency Experts, our main goal is to rescue your business but sometimes that is not always possible. Our experienced Insolvency Practitioners in Bolton are available now on 0300 303 8284 or via our contact us page for honest and confidential advice."
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What can a bailiff legally take from my workplace or home?

Nick Brierley - April 3, 2018

Enforcement officers, also known as bailiffs can be appointed by a creditor to recover the money which is owed to them. Nick Brierley at Bolton Insolvency Experts explains your rights and what legal powers a Bailiff wields. If the business is not able to pay the debt in full, then the bailiff is entitled to […]

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  string(3168) "When a limited company becomes insolvent, directors receive protection from personal liability through what is known as the ‘veil of incorporation.’ The difference between this and a sole trader insolvency is that a sole trader and their business are not regarded as separate legal entities.

For a sole trader, it becomes a personal insolvency issue whereby they are wholly responsible for the debts of their business, and therefore at risk of personal bankruptcy if they can’t repay creditors.

A business decline can occur due to many factors, and sometimes alarmingly quickly. Seeking professional advice from an Insolvency Practitioner (IP) is vital as soon as you know there is a problem, because if the business enters insolvency, business and personal debts of the sole trader will be combined and they may have to declare bankruptcy.

Jason Elliott from The Insolvency Experts explains further.

There are two formal routes when sole traders become insolvent:

Individual Voluntary Arrangement (IVA)

An IVA is a formal and legally binding insolvency procedure which can last up to 5 years. If an IP believes it is viable, they may recommend an IVA. If the proposal is agreed, creditors who are include are not able to take legal action to recover any debts included within the arrangement. The debtor must continue to repay the agreed amounts throughout the IVA term, otherwise they risk the IP forcing the IVA and petitioning for their bankruptcy. The benefits of an IVA are often that cash flow is improved, and all unsecured debts can be included in the arrangement. Additionally, the funds to repay an IVA can come from future projected profits of the business, or from the sale of an asset or refinancing.

Enforced bankruptcy

When a creditor is owed over £5k, and has unsuccessfully tried to recover their debt, they can petition for bankruptcy of a creditor through the Court. HMRC are known to regularly pursue this route to recover arrears of tax and NI from businesses they believe to be insolvent, but if it is still viable there may be ways to improve the financial situation – by refinancing, for example, or negotiating an IVA.

Declaring bankruptcy

Declaring bankruptcy is an unfortunate last resort for sole traders and can result in personal and business assets being lost. Sole traders must petition for their own bankruptcy through the Court which then hands over control of assets to an appointed supervisor. The assets are then valued, and can be sold in order to repay creditors. The sole trader will not automatically lose their home - this is dependent on the equity available, and whether it is worthwhile for the supervisor to sell it. Whilst the bankruptcy period generally lasts for 12 months, those concerned can rebuild their credit rating during this time. At The Insolvency Experts in Bolton, our main goal is to rescue your business but sometimes that is not possible. Our experienced team are available now on 0300 303 8284 or via our contact us page for honest and confidential advice." ["post_title"]=> string(69) "If you are a sole trader concerned about Insolvency – read this now" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(38) "sole-trader-concerned-about-insolvency" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-04-06 12:15:41" ["post_modified_gmt"]=> string(19) "2018-04-06 12:15:41" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3516" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

If you are a sole trader concerned about Insolvency – read this now

Jason Elliott - March 26, 2018

When a limited company becomes insolvent, directors receive protection from personal liability through what is known as the ‘veil of incorporation.’ The difference between this and a sole trader insolvency is that a sole trader and their business are not regarded as separate legal entities. For a sole trader, it becomes a personal insolvency issue […]

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  string(3012) "A Partnership Voluntary Arrangement (PVA) is an agreement whereby Partnerships repay a proportion of business debts to unsecured creditors. It is useful to encourage viable partnerships back to profitability, and is similar to the limited company version which is the Company Voluntary Arrangement (CVA).  Jason Elliott from The Insolvency Experts explains further.

It’s essential that all partners are committed to making a success of an official payment plan and it’s important to know that even with a PVA in force each Partner may require their own Individual Voluntary Arrangements (IVAs) in addition to the PVA. Interlocking, or simultaneous IVAs serve to protect partners from personal bankruptcy whilst also safeguarding the business.
  
Essentially, a PVA provides a partnership’s creditors with an improved return than would be possible if the partnership was dissolved, and it also offers a chance to restructure the business.

The partners can put together a proposal for a repayment plan, usually with the help of an Insolvency Practitioner (IP), and this is based on repayment of a proportion of the debt – and an explanation is provided as to why the partnership has declined, and the reasons why its creditors should accept the proposed offer.

If at least 75% by value of creditors agree, the business will make a single payment each month rather than paying multiple creditors. The amount is distributed to creditors by the appointed IP.

If debts remain at the end of the PVA term they are written off, and the business carries on trading without the burden of unsustainable debt. PVAs generally last for three to five years, and are legally-binding agreements for both the partners and their creditors.

Gaining access to working capital via a PVA

Lack of cash behind the partnership’s insolvency could be due to temporary circumstances, making the underlying business potentially viable for the long term. The partners may be able to trade their way out of the situation, gradually improving cash flow with some alterations to operational practices or business structure. Alternatively, if the business owns one or more valuable assets that could be sold in order to generate a lump sum of working capital, the IP may decide that this is sufficient to support the business until things improve. There are numerous benefits to a PVA. Most importantly, partners stay in control of their business, and continue to trade. Further, a breathing space is created to deal with the partnership’s debts, without creditor pressure and creditors receive a higher return than if the partnership was wound-up. Refinancing or restructuring is more possible to achieve to overcome short-term cash flow problems and interest and charges on the debt are ceased. For more information on PVAs, contact one of our expert team at The Insolvency Experts in Bolton on 0300 303 8284 or via our contact us page " ["post_title"]=> string(50) "What is a Partnership Voluntary Arrangement (PVA)?" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(47) "what-is-a-partnership-voluntary-arrangement-pva" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-04-06 12:10:49" ["post_modified_gmt"]=> string(19) "2018-04-06 12:10:49" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3510" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

What is a Partnership Voluntary Arrangement (PVA)?

Jason Elliott - March 20, 2018

A Partnership Voluntary Arrangement (PVA) is an agreement whereby Partnerships repay a proportion of business debts to unsecured creditors. It is useful to encourage viable partnerships back to profitability, and is similar to the limited company version which is the Company Voluntary Arrangement (CVA). Jason Elliott from The Insolvency Experts explains further. It’s essential that […]

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  string(2332) "Investigations into payroll arrangements among companies across the UK brought in over £800m to the Treasury during the 2016/17 tax year.  Ben Cowgill at The Insolvency Experts provides further information.

Use of self-employed contractors

The figure represents a rise of 16% compared with the previous tax year and is believed to reflect an increased focus within HMRC on issues relating to company payrolls and self-employment. HMRC now has an established team of specialists which focuses on various employment statuses and the use of self-employed contractors across a variety of industries. Investigations specifically into businesses and their use of self-employed professionals is understood to have led to the discovery of numerous instances of alleged misuse of self-employed workers. Amounts recovered by HMRC as a result of these enquiries are known to be worth in excess of £800 million for the tax year 2016/17 because of a freedom of information request which saw those details released publicly by the UK tax authorities.

Intense scrutiny of gig economy by HMRC

HMRC’s clampdown on the use of what are sometimes called ‘hidden employees’ reportedly saw £503 million recouped from large companies during the most recent tax year, which represents a notable increase compared with the figure of £383 million recouped from large companies for the same reasons during the year 2015/16. The issue of ‘hidden employees’ and the tax implications for businesses that rely heavily on self-employed individuals have been the subject of considerable political and HMRC scrutiny in recent months. HMRC makes no secret of its suspicions as to how companies classify their workers and considering the scale that the gig economy has grown to, it is no surprise that it’s now under intense scrutiny by HMRC. As well as its broader brush investigations in which HMRC aims to collect millions at a time, it is also combing carefully through the minor details of payroll. Even the most trivial of expenses are now being investigated. For advice on this or anything else to do with your business, in financial distress or not, contact our team at The Insolvency Experts now on 0300 303 8284 or via our contact us page " ["post_title"]=> string(66) "Clampdown on ‘Hidden Employees’ brings in over £800m for HMRC" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(58) "clampdown-on-hidden-employees-brings-in-over-800m-for-hmrc" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-04-06 15:12:41" ["post_modified_gmt"]=> string(19) "2018-04-06 15:12:41" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3499" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

Clampdown on ‘Hidden Employees’ brings in over £800m for HMRC

Ben Cowgill - March 17, 2018

Investigations into payroll arrangements among companies across the UK brought in over £800m to the Treasury during the 2016/17 tax year. Ben Cowgill at The Insolvency Experts provides further information. Use of self-employed contractors The figure represents a rise of 16% compared with the previous tax year and is believed to reflect an increased focus […]

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  string(2881) "If you believe a supplier or customer is experiencing financial distress, it is important to find out as much as possible about their situation, in order to stop it having an adverse effect on your business. Our Bolton Insolvency Experts can give a free consultation if you find yourself in this situation.

Identifying the signs of financial difficulty in a customer or supplier as soon as possible gives you time to think, consider and readjust. You may need to reorganise your source of supply, or to revaluate your options should your customer go out of business. The after effects when you lose a business connection like this can have a massive impact, particularly if it involves a principal supplier or key customer. 

Ben Cowgill at Bolton Insolvency Experts explains what should you look out for, and how can you protect your own business.

Indicators that your supplier/customer is in financial distress

• Avoidance of communications and guarded when you contact them • Late payments when previously there was no history of default • Company is not developing as you would expect – perhaps they are using out-dated technology, or selling assets with a view to streamlining the business • Customers requesting an extension to their credit terms • County Court Judgements have been made against the supplier or customer • Company accounts have been filed late • Directors or senior staff are resigning

Credit risk

The risk of offering credit to your customers can be mitigated with a strong credit management policy. Performing credit checks on your customers, not only at the beginning of the business relationship, but also at regular intervals will help to identify a decline. Other useful policies when dealing with credit risk include presenting clear terms of trade in all of your contracts. Terms and conditions might include: • Charging interest on overdue payments • Ownership of goods only transfers to the customer once final payment has been received • The obligation for customers to contact you immediately with any invoice queries or problems, rather than waiting until the due date

Companies House information

Valuable information can be obtained from Companies House. You can examine a company’s last set of accounts or ask your accountant to do this on your behalf, discover whether they have sold any business assets and if the proceeds have been used to pay trade creditors – this is a common sign that cash flow is an issue. If you are concerned about the financial stability of either a customer or supplier and are worried about the impact this could have on your own business contact Bolton Insolvency Experts today on 0300 303 8284 or via our contact us page for confidential, honest advice. " ["post_title"]=> string(85) "If I suspect a customer or a supplier are in financial distress – what should I do?" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(30) "supplier-in-financial-distress" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-03-13 09:41:09" ["post_modified_gmt"]=> string(19) "2018-03-13 09:41:09" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3479" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

If I suspect a customer or a supplier are in financial distress – what should I do?

Ben Cowgill - March 13, 2018

If you believe a supplier or customer is experiencing financial distress, it is important to find out as much as possible about their situation, in order to stop it having an adverse effect on your business. Our Bolton Insolvency Experts can give a free consultation if you find yourself in this situation. Identifying the signs […]

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  string(2784) "Jason Elliott at Bolton Insolvency Experts explains why sometimes business cashflow problems can affect you personally. 

Sole traders and individual members of a partnership are personally responsible for business debts, but if you own a limited company then the limited liability status of your company means that any business debts are limited to the company and not the directors personally. This means that as a director your personal finances should not be affected. However, although this sounds quite straightforward there are exceptions which you should be aware of. 

Personal guarantees

If you have signed personal guarantees, for example on a business loan or property lease, and the business is unable to meet the agreed payment terms, then as a guarantor you will be personally responsible. If you fail to meet the payment schedule, then the creditor, whether it’s the landlord or the bank, will pursue you personally for the debt. You should look at all your agreements to see precisely what your situation is.

Trading whilst insolvent

A company is classed as insolvent if it’s unable to pay its debts as they fall due or when its liabilities exceed its assets. If you believe that your company is insolvent and you continue to trade, adding to the company debt, then as a director, you can become personally liable for that debt. In these circumstances, if a director incurs further debt whilst knowing that the company has no chance of recovering and paying that debt back then this can be classed as wrongful trading. If a company director is found guilty of wrongful trading, even though they have been acting through the company, they can become personally liable for any losses suffered as a result and they may also have to pay damages. Likewise, if a misfeasance claim is brought against the company, where the directors have knowingly acted in an inappropriate way and another party suffers as a result, then again directors can become personally liable.

Overdrawn directors’ loan account

Having an overdrawn directors’ loan account when a company goes into liquidation also means that the directors will be personally liable for repaying that loan. The insolvency practitioner handling the liquidation can demand repayment of the loan as it is their duty to act in the interest of company creditors. They can even take legal action against directors to force them to pay, which could lead to bankruptcy if they are not able to pay. If your company is in financial distress and you are worried about the impact this could have on you personally, contact our team at Bolton Insolvency Experts now on 0300 303 8284 or via our contact us page." ["post_title"]=> string(85) "Could cashflow problems in my business affect my personal finances and credit rating?" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(32) "cashflow-problems-in-my-business" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-03-12 15:39:07" ["post_modified_gmt"]=> string(19) "2018-03-12 15:39:07" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3462" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

Could cashflow problems in my business affect my personal finances and credit rating?

Jason Elliott - March 12, 2018

Jason Elliott at Bolton Insolvency Experts explains why sometimes business cashflow problems can affect you personally. Sole traders and individual members of a partnership are personally responsible for business debts, but if you own a limited company then the limited liability status of your company means that any business debts are limited to the company […]

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  string(4626) "An insolvent liquidation procedure involves the sale of assets, and distribution of the proceeds amongst company creditors. An IP is appointed to administer the process, and must ensure that all creditors are paid according to the hierarchy laid down in the Insolvency Act 1986. Our Insolvency Experts in Bolton can ensure your creditors are paid on time.

Jason Elliott at Insolvency Experts in Bolton explains the ‘hierarchy’ and why unsecured creditors often fare badly in in liquidation procedures.

Each class of creditor must be paid in full before funds are allocated to the next. Creditors are ranked as follows:

•Liquidator fees and expenses
•Secured creditors with a fixed charge
•Preferential creditors
•Secured creditors with a floating charge
•Unsecured creditors
•Connected unsecured creditors
•Shareholders

Liquidator fees and expenses

The liquidator’s remuneration and fees for administering the process are first to be paid. Administrative costs and expenses can be incurred for holding meetings, realising assets, distributing funds, providing accounts and reports, and investigating the conduct of directors.

Secured creditors with a fixed charge

This creditor group includes banks and other financial institutions that have provided borrowing to the company, taking security on one or more business assets. For example, if the company has borrowed money to purchase land or property, the bank will take fixed charge security allowing them to sell the asset on default or liquidation, and thereby recoup their money.

Preferential creditors and ‘prescribed part creditors’

Preferential creditors are members of staff entitled to certain statutory payments. These include arrears of wages, holiday pay, redundancy, and unpaid pension contributions. The ‘prescribed part’ refers to an amount set aside from the sale of assets with a floating charge taken out after 15th September 2003. This sum is used to provide unsecured creditors with a greater chance of recovering part of their debt. 50% of the first £10k realised from the sale of floating charge assets is set aside in this way, and then 20% of any realisations between £10k and £600k. Anything left goes towards repaying floating charge-holders.

Secured creditors with a floating charge

Assets subject to a floating charge can include stock, raw materials, work-in-progress, fixtures and fittings – essentially, any other assets not subject to a fixed charge. Assets of this type can be traded in the normal course of business. Terms and conditions relating to fixed and floating charges are laid out in a debenture - a document signed by the directors and registered by the creditor at Companies House.

Unsecured creditors

Unsecured creditors generally consist of the company’s customers, suppliers, contractors, certain employee claims, and HMRC. If all unsecured creditors have received an equal dividend and there are additional funds available, interest is also paid on their debt.

Connected unsecured creditors

Unsecured creditors who have an association with the company are eligible to be paid a dividend upon liquidation. This creditor group could include a director’s family member, or an employee who has loaned money to the business. Employee expenses also fall into this category.

Shareholders

Shareholders are the final group to be paid. Because they have taken a business risk in providing money to the company, they are not entitled to a distribution until all other creditor groups have been paid. In an Insolvent Liquidation it is unlikely that there will be sufficient funds to pay this class of creditor. All classes of creditor must be paid in full before the liquidator can distribute funds to the next group and it is important to maximise the interests of creditors once you enter insolvency, otherwise as a director you could be subject to accusations of wrongful or unlawful trading. Fixed and floating charges are a complex area to understand, particularly if more than one charge has been taken on an asset. The Insolvency Experts can help clarify your company’s financial position, and investigate who takes priority in cases where you have multiple creditors. Also, we will ensure that your legal obligations as a director are met and reduce your risk of exposure. For honest, confidential advice contact our Insolvency Experts in Bolton on 0300 303 8284 or via our contact us page. " ["post_title"]=> string(97) "In a liquidation procedure in what order does the Insolvency Practitioner (IP) pay the creditors?" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(64) "what-order-does-the-insolvency-practitioner-ip-pay-the-creditors" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-03-13 10:44:54" ["post_modified_gmt"]=> string(19) "2018-03-13 10:44:54" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3489" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

In a liquidation procedure in what order does the Insolvency Practitioner (IP) pay the creditors?

Jason Elliott - March 7, 2018

An insolvent liquidation procedure involves the sale of assets, and distribution of the proceeds amongst company creditors. An IP is appointed to administer the process, and must ensure that all creditors are paid according to the hierarchy laid down in the Insolvency Act 1986. Our Insolvency Experts in Bolton can ensure your creditors are paid […]

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  string(3924) "If your company has entered insolvency and there is no possibility of returning to profitability, you will need to repay your creditors in so far as is possible and close down the business. A voluntary liquidation process can be costly, however, and you may struggle to afford the professional fees.

Jason Elliott from Insolvency Practitioners Bolton looks at your options:

Director redundancy

Company directors are often surprised to learn that they may be able to claim redundancy pay. The following sets out criteria that should be met to be eligible for redundancy pay as a director: • Have worked for the company for a minimum period of two years • Have in place a contract of employment whether it be written, verbal or implied • Work for a minimum of 16 hours per week • Undertake duties that are not merely advisory • Be owed money from the company - arrears of holiday pay, for example If your claim is successful this money could potentially pay for an IP to administer the liquidation process.

A creditor could wind-up your company

Liquidation via a winding-up petition from a creditor would result in the enforced closure of your company. HMRC are inclined to instigate compulsory liquidation procedures when a company gets into arrears with tax and NI, particularly if a Time to Pay arrangement has failed. They don’t need to have issued a CCJ or statutory demand prior to the winding-up petition, so the process is relatively fast. This is clearly not the ideal outcome for most businesses, but if your business really is in dire straits, it could help the issue of paying the IP. There are significant downsides however which include increased scrutiny of your actions leading up to the company’s insolvency by the Official Receiver (OR).

Investigations by the OR

The OR will investigate the reasons why your company has entered insolvency and will look back several years for instances of misconduct or unlawful trading. Further action could be taken against you if this or any ‘antecedent transactions’ are discovered. Antecedent transactions include making preferential payments, selling or transferring assets at an under value, and wrongful trading. Antecedent transactions can be reversed if they were made when the company was insolvent, or are found to have caused the insolvency, and assets can be recovered by the liquidator for the benefit of company creditors. As a director, you could face serious allegations of misconduct, as well as personal liability for some or all of the company’s debt if mistakes are discovered. In allowing a creditor to forcibly wind up your company, as a director, you effectively lose any influence over the liquidation process, including who is appointed as liquidator, and when the company is actually placed into liquidation. The other liquidation option, Creditors’ Voluntary Liquidation (CVL), allows you greater control over the closure of your business, with investigations into your conduct as a director being less aggressive.

Dissolution

It might be possible for you to be able to strike off your company at Companies House, a process known as company dissolution. The business must not owe any monies, however, as creditors can demand that it is restored to the Register of Companies at a later date to recover their money. If you are worried about the cost of closing your company and would like advice, The Insolvency Experts can help. We are insolvency specialists with vast experience of the liquidation process, and may be able to offer alternative courses of action which could result in your business being recovered and fees can be negotiated. Jason and his experienced Insolvency Practitioners Bolton are available now on 0300 303 8284 or via our contact us page. " ["post_title"]=> string(113) "I need an Insolvency Practitioner (IP) to close my company but I am concerned that I am unable to afford the fees" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(31) "concerned-unable-to-afford-fees" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-03-13 11:20:00" ["post_modified_gmt"]=> string(19) "2018-03-13 11:20:00" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3494" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

I need an Insolvency Practitioner (IP) to close my company but I am concerned that I am unable to afford the fees

Jason Elliott - March 2, 2018

If your company has entered insolvency and there is no possibility of returning to profitability, you will need to repay your creditors in so far as is possible and close down the business. A voluntary liquidation process can be costly, however, and you may struggle to afford the professional fees. Jason Elliott from Insolvency Practitioners […]

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  string(2560) "Whilst it can be extremely distressing to realise that you can’t meet your payroll bill it is important to understand that this doesn’t have to mean the end for your business. At The Insolvency Practitioners in Bolton we are accustomed to assisting companies struggling with cash flow issues, and we advise on a range of finance options that would allow you to pay your employees, and take off some of the pressure.

Nick Brierley explains some of the options available.

Invoice factoring and invoice discounting

These processes involve ‘selling’ your sales ledger to a financing company, who take ownership of your debtors in exchange for a fee. Most high street banks offer this service and there are several independent specialised providers in the market. Invoice discounting is similar to factoring, but enables you to retain control of collecting your debts. This is helpful if you wish to keep the arrangement confidential from customers, for example if you feel it could damage your credibility. At The Insolvency Experts we have relationships with, and experience of almost all providers and can assist in securing the best possible arrangement for your business.

Asset finance

Whist your company might be experiencing poor cash flow, it could well have valuable assets such as land and buildings. You could be in a position to leverage their value by releasing cash. You continue to retain full use of the assets, and the cash injection could help with paying your staff, as well as meeting other regular outgoings.

Company Voluntary Arrangement(CVA)

Where a company is unable to continue to trade due to its historic liabilities/overheads, a CVA could be a good choice if the underlying business is viable. A CVA can provide the breathing space needed to get the company back on track, as it halts any legal action being taken. This type of arrangement has to be negotiated by a qualified IP, who goes through the company finances to ensure that it’s the most appropriate option, and also that you’re not repaying more than you can afford. Being unable to to pay your employees is extremely distressing, and a warning sign that you need professional guidance. At The Insolvency Experts, our main goal is to rescue your business but sometimes that is not always possible. Our experienced Insolvency Practitioners in Bolton are available now on 0300 303 8284 or via our contact us page for honest and confidential advice. " ["post_title"]=> string(74) "I cannot afford to pay my staff – does this mean the end of my business?" ["post_excerpt"]=> string(0) "" ["post_status"]=> string(7) "publish" ["comment_status"]=> string(4) "open" ["ping_status"]=> string(4) "open" ["post_password"]=> string(0) "" ["post_name"]=> string(43) "i-cannot-afford-pay-staff-mean-end-business" ["to_ping"]=> string(0) "" ["pinged"]=> string(0) "" ["post_modified"]=> string(19) "2018-03-12 15:55:09" ["post_modified_gmt"]=> string(19) "2018-03-12 15:55:09" ["post_content_filtered"]=> string(0) "" ["post_parent"]=> int(0) ["guid"]=> string(45) "http://www.theinsolvencyexperts.co.uk/?p=3470" ["menu_order"]=> int(0) ["post_type"]=> string(4) "post" ["post_mime_type"]=> string(0) "" ["comment_count"]=> string(1) "0" ["filter"]=> string(3) "raw" }

I cannot afford to pay my staff – does this mean the end of my business?

Nick Brierley - February 28, 2018

Whilst it can be extremely distressing to realise that you can’t meet your payroll bill it is important to understand that this doesn’t have to mean the end for your business. At The Insolvency Practitioners in Bolton we are accustomed to assisting companies struggling with cash flow issues, and we advise on a range of […]

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HMRC Winding Up Petition Rates at a 5 year High
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