Business insolvency

[Ruby]

My company (Ltd) is in a repayment plan with HMRC but I am struggling to meet future payments to them due to the amount I have to pay per month on the repayment plan.

I am trying to be proactive in this matter rather than reactive and wondering if voluntary insolvency is the best option for me.

Could anyone advice in the pros and cons of going down this route and perhaps a reputable involvency company to approach that will not take outrageous advantage of my situation.

[andrew1]

My company (Ltd) is in a repayment plan with HMRC but I am struggling to meet future payments to them due to the amount I have to pay per month on the repayment plan.

I am trying to be proactive in this matter rather than reactive and wondering if voluntary insolvency is the best option for me.

Could anyone advice in the pros and cons of going down this route and perhaps a reputable involvency company to approach that will not take outrageous advantage of my situation.

It's difficult to tell exactly because it depends on the strength of your sales and pressure from your creditors, but maybe you could colour this for us by giving some ball park numbers on the amount of your creditors against the strength of the business.

Pro's of a CVA are that if you get the agreement of the current creditors, you will get a deal which takes your creditors down to a % of the outstanding balance and you pay an agreed fixed sum over the number of years agreed with the IP. (Insolvency Practitioner).

That's like having much of the debt written-off, but the downside to that is that you are not going to make many people happy if your creditors are important to the continuous running or supply chain of your business and your credit they'll give you will often vanish so almost having to pay on a cash basis depending on your product or service.

I think a lot depends on why this cash-flow crisis has hit you and whether it's a lack of business or an increase in business.

You could factor your invoices and banks are generally happy to discuss that although that takes a chunk out of your profit margins of course if not managed properly. Again, that suitability would depend on the type of business you run.

If you have faith and a strong belief your cash-flow will improve then don't give up by thinking this is hopeless. Many businesses rely on cash-flow when a business is expanding and if your Debtors are making you wait for payment then there is always improvement which could be made getting your invoice payments (receipts) in a little faster.

Tell us more if you can without giving away who you are or what you do.

As for recommending an IP, I think this is like buying anything, you need to talk to a number before you decide which is best for you. If you have a solicitor they often can make recommendations or your Accountant, but my suggestion would be to shop around carefully.

I have experience of this as I worked in the credit industry for nearly 30 yrs and ran my own businesses (Ltd), opened and closed numerous over the years and run a highly charged cash-flow reliant business so can speak with some experience of this situation you are in. I also had plenty of run-ins with HMRC on similar issues. However, I did win a crate of champers from one of the High St banks on a business forum for my input into improving business cash-flow so I hope what I said helps.

A1

[Ruby]

Thanks Andrew, I was really having a bad day when I made my post. The only people we owe money to are HMRC but we do have a repayment plan with them. As you can imagine they LOVE playing their psychological card.