If you run a busy company then it can be easy to ignore the early signs that you may be in trouble financially. Debts tend to creep up on you quite slowly and unless you really have your eye on the ball it can be hard to identify potential problems. However, before you know it, things can take a very swift downwards spiral and from there on it can be very difficult to get back on top.
In recent years we have had quite a bleak economy, with a record number of businesses either struggling financially or ceasing to trade. When this point is reached it is likely that corporate recovery advice will be sought. In a nutshell, corporate recovery is when professional accountants and specifically trained staff are drafted in to help nurse a company or individual back to financial well being and resolve the issues that brought them into the negative position.
You may be a little surprised to see us commenting on the Chancellor’s recent Budget. After all, we don’t advise on tax issues. However, deep in the small print of the Chancellor’s announcements was one piece of bad news … really bad news.
In these austere times everybody has cause for worry – particularly company owners. If you are at the helm of a business then you will have seen your company through the good times and the bad, however there is always the very real risk of something going terribly wrong. At this point many companies are faced with the very real risk of company insolvency.
According to research by peer-to-peer lending group, rebuildingsociety.com, the average SME business owner has invested £22,700 of their own personal money into their business in the last year. And the study shows that 37% of those planning to raise money outside traditional bank borrowing will use their personal credit cards (despite standard interest rates typically being around 18.9%, and often much higher).
Here at tri group we offer second to none insolvency advice, corporate recovery advice and bankruptcy advice. So it is not surprising that our very own Graham Down (our director of insolvency specialists) has been appointed to investigate the financial affairs of British National Party Leader and MEP, Nick Griffin.
There is some – at least, anecdotal – evidence that HMRC have recently been making much greater use of their powers to make directors personally liable for the national insurance debts of their failed companies. The power derives from section 121C of the Social Security Administration Act 1992, which allows HMRC to issue personal liability notices (PLNs) when a company has failed to pay NI contributions and that failure is “attributable to the fraud or neglect of one or more individuals who were, at the time of the fraud or neglect, officers of the company” (known as “culpable officers”).
According to research carried out by Credit Action, the financial education charity, outstanding personal debt in the UK stood at £1.420 trillion at the end of November 2012. That means that UK individuals owed almost as much as the entire country produced in the whole of 2011!
The latest information from Deloitte detailing company insolvency data shows that there’s been a significant fall in the number of companies entering administration. The figures for January to September 2013 are 16.4% lower than for the same period in 2012, indicating that there has been an overall improvement in trading conditions.