Originally written by Simon Dolan on Small Business
Earlier this month, aviation millionaire Simon Dolan, who is worth £200m according to the Sunday Times Rich List, lost his bid to bring a High Court challenge against the Government over the coronavirus response. He is appealing against the against the decision denying him permission to bring a judicial review over lockdown.
When I first initiated legal proceedings against the Government over the introduction of lockdown, the last thing I thought I would be talking about is the changes to the Insolvency Act, and yet these changes are fundamental, regressive, and without doubt will lead to far more issues – all in a vain attempt to prop up the economy for a few more weeks.
Yet, as an accountant with over 30 years’ worth of experience in the industry, I have looked on in horror over the last few months as the Corporate Insolvency and Governance Act breezed through the Commons and Lords without any adequate scrutiny and became law two weeks ago.
>See also: How to deal with a furloughed employee who refuses to return to work
What the Corporate Insolvency and Governance Act means
In the round, the introduction of the Corporate Insolvency and Governance Act
Tag Archive for Insolvency
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Half a million small businesses in financial distress
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Half a million small businesses were in significant financial distress in the first of three months of the year, according to Begbies Traynor.
And this could only be “the tip of the iceberg” for the second quarter as the coronavirus lockdown comes into effect, cratering the UK economy and pushing small businesses into closing their doors.
One in four businesses in Britain has already been forced to close down temporarily because of the government’s coronavirus containment measures, according to the Office for National Statistics.
>See also: Coronavirus emergency business loans may be changed yet again
In a survey of 5,316 businesses, the statistics agency found that 25 per cent had closed between March 23 and April 5.
Insolvency specialist Begbie Traynor’s latest quarterly Red Flag Alert survey found that small- and medium-sized businesses have been hit hardest, with 504,000 businesses saying they are in financial distress – just 5,000 short of the 509,000 total.
Almost 2,300 of these businesses were in “critical distress”, which is usually a precursor to insolvency, the firm said.
Ric Traynor, executive chairman of Begbies Traynor, said: “We expect these numbers to be the ‘tip of the iceberg’ and as the year progresses, we expect to
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Two in five small businesses face closure because of coronavirus
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Two in five small businesses face temporary closure because of coronavirus, according to productivity organisation Be the Business.
Thirty-nine per cent of small and medium-sized enterprises (SMEs) have already closed temporarily or plan to do so within the next month.
The research, conducted by Opinium, also found that 7 per cent of firms have already shut permanently, and a further 12 per cent think they are likely to do this within the next month.
>See also: Banks not cooperating with coronavirus loan, complain small businesses
And 23 per cent have made or are planning to make redundancies.
Responding to the coronavirus threat, SMEs say they are equally focused on managing cash flow (31 per cent) and accessing grants and government loans (31 per cent). However, the longer-term issue of supporting their staff was highlighted by a quarter (24 per cent) of firms.
As for the types of support and advice SMEs are looking for, this varies according to size.
For micro-businesses (those with fewer than 10 employees), cashflow is crucial, with 40 per cent stating they need advice on this
Small businesses (10-49 employees) are looking for support to access grants and government loans (31 per cent)
Medium-sized firms (50-249 employees) want
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5 steps to take if a company you supply goes into administration
by Rebecca Dunne • • 0 Comments
Originally written by Rebecca Dunne on Small Business
With the risk of increased administrations, it is essential to be aware of steps you can take if you supply a company that is at real risk of going into administration.
Administration is when a company cannot afford to pay its debts, and an insolvency practitioner (IP) is appointed to run the company. The IP takes control over the company’s assets, allowing these to be sold to pay back creditors.
What if you suspect your client is heading into administration?
So, how can I avoid getting stuck in this tricky position?
Know your industry
Keep up to date on the activities of the businesses you engage with and supply. If you can see distressing signs, then you should reconsider your deal. Of course, sometimes you may hear rumours through the grapevine, but you can never be sure – so always gets your facts checked.
Use a credit rating tool
Companies like Experian, Creditsafe and Redflagalert track the financial health of companies. You can set up alerts for your clients so you will be told if there has been a CCJ raised against them or if their recent filed accounts point to problems. If you receive warnings, it would be wise
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Small business insolvency rises by 6pc in first quarter
by Timothy Adler • • 0 Comments
Small business insolvency rose by 6.3pc in the first three months of 2019 compared with the previous quarter. There were 4,187 company insolvencies between January and March this year, according to The Insolvency Service. Construction, administration and retail — sectors all struggling with higher wages and employer pensions auto-enrolment costs — were the sectors most
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Insolvency: government initiatives have failed small businesses
by Anna Jordan • • 0 Comments
Insolvency is making an unwelcome return to the headlines. The number of individuals who were declared insolvent last year reached its highest level since the aftermath of the financial crisis. According to the Insolvency Service, 99,196 people in England & Wales were declared insolvent in 2017 – up by 9.4 per cent on the year
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UK insolvency levels set to increase five per cent over 2017
by Owen Gough • • 0 Comments
UK business insolvency will rise by +5 per cent in the next 12 months as the economic slowdown, rising input prices and increased late payment risks begin to take their toll, according to Euler Hermes. This is in sharp contrast with the rest of the continent, where insolvencies will fall by -4 per cent in Western Europe and
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Brexit could be to blame for the latest run of business insolvency
by Owen Gough • • 0 Comments
Over 760 businesses have ceased trading in December 2016, with more to follow in the run up to Christmas, according to a survey of the latest insolvency notices published in The Gazette. The research, carried out on behalf of London insolvency practitioners Hudson Weir, reveals that 14.5 per cent of these companies were operating in
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European Commission announces plans to reform business restructuring and insolvency rules
by Ben Lobel • • 0 Comments
When a UK business is struggling, the choices can seem restricted to insolvency procedures that do not always provide the required solutions and are often forced on the business owner by the creditors. To avoid insolvency can mean entering into arrangements with creditors together with possible refinancing, but that sector has become increasingly difficult over
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