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But even we’re surprised by how many inquiries we’ve been getting that centre around one specific question - can a director be held personally liable for a bounce back loan?

So we’ll take the time to do a deep dive into this question and answer it as best we can - because it’s not a strictly yes or no answer. 


Private investigations

One reason why we think a lot of directors are becoming more nervous than they need to be about the prospect of being made personally liable for bounce back loan arrears or other debts is due to an imminent law change. 

The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill has had a lot of publicity before its legal ascent probably coming before the end of 2021. 

The main headlines have been the new power being granted to The Insolvency Service that will allow them to investigate directors of dissolved companies to see if there was any unsavoury activity such as striking off the company while it still had a bounce back loan or other debt. 

In these specific circumstances, which could go back several years depending on the investigation, then a director who knowingly breached their legal duties, or should have known, could find themselves in trouble and facing a range of punishments including fines, disqualification of up to 15 years as well as being made personally liable for improperly incurred debt including bounce back loans. 

The key point to remember here is that a bounce back loan had a wide-ranging remit for use - to provide an economic benefit to the business during the pandemic. 

This criteria could be met in many ways including staff costs and wages, new plant or machinery purchasing, investing in tangible assets or being used to pay down existing debt. 

It would also be perfectly legal for a business to have borrowed the lump sum and put it all into a savings account and not spent a penny - as long as they make the agreed repayments when they fall due. 

Some directors are worried because they spent the money they borrowed - which was the original purpose! - then they might be in trouble.  

As long as they can demonstrate that it was spent on reasonable and legitimate company business, and not on a range of supercars for directors for example, then they will have little to worry about. 

If the business is clearly unviable or cannot pay its accrued debts and the only realistic way forward is through liquidation then the bounce back loan will be treated as any other type of unsecured borrowing and will be written off. 

Unlike the Coronavirus Business Interruption Loan Scheme (CBILS) where the government guaranteed 80% of the loan and the bank could seek a personal guarantee from directors for the remaining 20%; a bounce back loan was 100% guaranteed. 

This meant that even if the business was liquidated and the loan couldn’t be repaid in full, the bank would still be able to claim back its capital providing it could prove it had made a reasonable attempt to reclaim the loan. 

In any liquidation, the insolvency practitioner has to provide a report on the directors actions leading up to the insolvency event and will be satisfied if the directors can provide a reasonable and logical explanation, with evidence, for how they used the bounce back loan to support the company. 

If they have any questions, they will raise them with directors before submitting the report giving them ample opportunity to put their version of events and iron out any areas of confusion.


Sole Traders

The picture is slightly different when it comes to sole traders as their trading structure doesn’t recognise any legal separation between the company and the individual.  

Any debts incurred will fall onto the individual including any bounce back loan debt but an insolvency practitioner will be able to go through any alternative arrangements a sole trader could benefit from including an Individual Voluntary Arrangement (IVA) which could avoid any outright defaults. 

Even if a sole trader does default and has to ultimately pay back the sum through other methods the British Business Bank has stated that “no recovery action can be taken over a principal private residence or primary personal vehicle for sole traders that have defaulted on bounce back loans.”

The only other circumstance in which the director of a liquidated company could potentially be made personally liable for a bounce back loan is if it was used to make preferential payments to creditors. 

In this scenario, a director would have borrowed and used the loan to refinance existing debts by paying off only those that had been personally guaranteed by them while leaving other liabilities to go unpaid. 

As well as being a breach of their director’s duties and obligations, in the event of a subsequent liquidation, this could be seen as a preferential payment and they could ultimately be made personally liable to repay these debts.


A bounce back loan doesn’t have any personal guarantees attached and the bank will ultimately be able to reclaim 100% of the loan from the government in the event of a liquidation and this and other debts being written off. 

Also if:

Then there will be no personal liability incurred from the bounce back loan and it will be closed for good as part of the liquidation process. 


Bounce back loan arrears are just one area of concern that directors might be focussing on at the moment. 

If your business has problems with VAT debt repayments, overdue HMRC arrears, issues with the end of the furlough scheme or other hurdles that seem too high to overcome right now - get in touch with us today. 

Our free initial consultation for business owners and directors provides them with the chance to talk to an insolvency professional discreetly and honestly about what they and their business is going through. 

Once we get a clearer understanding of the immediate issues and difficulties they’re tackling, we can help them create an effective and efficient strategy, including some actions that can be implemented immediately. 

Then we can focus on solutions for the next most immediate and challenging problems while the directors can once again dedicate their time and energy to looking to the future. 

Administrative Restoration

But is there a way that they can come back?  And why would a director want to resurrect a closed company anyway?

Administrative restoration is the official term for bringing a dissolved company back into existence and we’ll explain further how they can be returned to life and why directors might want to do this.


Why you should pay to liquidate your company


One reason why a dissolved company could be restored is if the directors believe it may have a profitable future trading again. Maybe the market conditions have changed or they are in a better position to make a success of the venture now than they were previously. 
The only limit to restoring a business in this way is it cannot have been dissolved for more than six years. 

The six year time limit also applies when directors look to restore a business in order to release and realise an asset. 
If a business is struck off or dissolved while still holding assets then they could become the property of the crown after a certain amount of time has elapsed. Also, they could be classed as ownerless or “bona vacantia”. 
In either scenario, if this is why a company is being restored then Companies House could temporarily place the business back on the register in order to facilitate the asset transfer or sale. 

Unlike the administrative restoration time limit of six years, there is no such restriction when it comes to pursuing claims against a dissolved business. The company might have to be restored in order for an injury or other legal claim to be lodged against it and subsequently defended.

The final reason to restore a struck off company is to rectify mistakes made during the initial process. 
A company can only be struck off if it has no debts or arrears.  
Under the imminent Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill - HMRC and the Insolvency Service will be granted retrospective investigation powers against directors. 
This will allow them to look at the circumstances and actions of directors of dissolved companies and if any errors were made, such as striking off a business with an outstanding bounce back loan or VAT arrears for example, they could be followed with sanctions. 
These would not only be fines or a disqualification period which could stretch to 15 years but under the new laws, directors could be made personally liable to repay company incurred debts.


Businesses that have been struck off by Companies House for failure to submit annual accounts or confirmation statements can also be reinstated but like all administrative restorations, they have to meet a certain criteria such as trading when they were struck off and that Companies House enforced the decision, not the directors.

If they do then they can apply to Companies House and complete an administrative restoration form.

If the business was not forcibly removed or doesn’t meet the criteria then they can seek company restoration by a court restoration order instead. 

Once the application is filed and if all the essential forms such as business accounts and financial statements are up to date then the procedure will usually be completed in about four months. 

Chris Horner, insolvency director with BusinessRescueExpert.co.uk said: “Restoring a company just to liquidate it might sound like a hassle but it could be the best thing a director could do to protect themselves if they have any concerns. 

“The new legislation is almost exclusively aimed at directors who have tried to avoid repaying bounce back loans and other debts through dissolving their businesses. 

“But directors who inadvertently struck off their company while it still had debts could very well get caught up in the same sweep.

“Directors who liquidate their companies voluntarily through a creditors voluntary liquidation (CVL) or other process don’t have anything to worry about - HMRC and the Insolvency Service are not targeting them. 

“To avoid any doubt and worry, it would make sense for a director to restore their company, liquidate it and then continue with their career after all the loose ends have finally been tied up.

“They would then avoid disqualification and being made liable for a compensation order up to the value of the company debts plus fines and costs on top.” 


Liquidation brings many benefits to a business owner or director. 

As well as having more say in the process of appointing a liquidator, they can also legally close down even if they owe bounce back loans or other debts.

It brings finality to the situation through a definitive ending allowing the owners or directors to move onto their next venture without any more stress. 

If a business has been dissolved improperly or if it had debts when it was struck off then this is a loose end that could become a bigger problem - especially if the Insolvency Service takes an interest in the business and how it was being run before closure. 

Getting advice from an insolvency professional is always a good idea if you’re thinking about closing a business but if you need to consider an administrative restoration then it’s essential. 

We offer a free initial consultation for any business owner or director to discuss the issues facing their company and together we can work out an efficient and effective solution which can usually be begun to be implemented almost immediately. 

The sooner you get in touch, the sooner we can help.

Endgame

The report found that although essential, the government’s overall response to the pandemic had exposed the taxpayer to significant financial risk for the foreseeable future and that while departments faced difficulties in responding quickly to the pandemic, these risks did not always achieve good value for money. 

The committee singled out the bounce back loan scheme as one of the programmes with a high level of risk reporting an estimated £26 billion of credit and fraud losses uncovered so far. 

Dame Meg Hillier MP, Chair of the Committee, said: “With eye-watering sums of money spent on Covid-19 measures so far the government needs to be clear, now, how this will be managed going forward, and over what period. 

“The ongoing risk to the taxpayer will run for 20 years on things like recovery loans, let alone the other new risks that departments across government must quickly learn to manage.

“If coronavirus is with us for a long time, the financial hangover could leave future generations with a big headache.”

Among the main conclusions and recommendations in the report are:

The report also highlighted the work of the National Audit Office’s (NAO) Covid-19 cost tracker which tracked expenditure and costs across the whole of government and pulled them together in one place. 

The NAO are working on a follow-up to their October 2020 report specifically into the bounce back loan scheme.

It is scheduled to be published in the winter of 2021 and will update their findings on the overall amount of bounce back loan arrears that have been repaid to date and how much remains outstanding. 

We’ve been reporting on bounce back loan arrears and repayment scenarios since April including regional and industry differences so know that whatever number they come up with, it’s going to be big and focus will then shift from data collation to debt recovery.


Businesses with bounce back loan arrears are being stopped from closing down


HMRC and the Insolvency Service are going to be very busy for the rest of 2021. 

They are already using their existing powers to close down businesses and sole traders who falsely obtained bounce back loans and are turning their attention to companies who took them out legitimately but have built up arrears. 

A recent FOI inquiry from BusinessRescueExpert.co.uk revealed that they are being helped by the Department of Business, Energy and Industrial Strategy (BEIS) who are objecting to companies with bounce back loans from being struck off the Companies House register. 

And the final piece of the enforcement jigsaw is still to come with the introduction of The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill which is proceeding through parliament at the moment and expected to become law before the end of the year. 

Amongst the new powers it will grant The Insolvency Service retrospective powers to investigate the directors of companies that have been struck off to examine the circumstances of the dissolution.  

Because the powers are retrospective, they can go back two or three years after the fact and are not limited to bounce back loans but other debts too. 

Any director targeted under the new law could reasonably expect sanctions including fines, disqualification of up to 15 years and potentially being made personally liable for repaying any illegally obtained debts and costs incurred. 

With the remaining government support measures being withdrawn at the end of September and creditors actions such as statutory demands and winding up petitions being allowed to be issued once again, businesses with outstanding bounce back loans and other debts including VAT arrears or unpaid rent or business rates will be understandably worried. 

Instead of wondering when and where the first creditors’ blow will land, directors and business owners can use this time to draw up their own counter strategies starting with some professional insolvency advice

During a free initial consultation, we will better understand the situation facing a business and give our honest appraisal of the options available, depending on what they would like to do. 

Some businesses might want or be able to restructure their debts and eventually trade their way back to profitability with creditors help and forbearance through a company voluntary arrangement (CVA)

An alternative option might be a company voluntary liquidation (CVL)  if there is no realistic path to recovery.  

This will allow the orderly closure of a business even if it has bounce back loan debt and other outstanding arrears that it can’t reasonably clear. 

There are choices and chances that can be taken - but only if the directors or business owners act in time to access them and work with us to act on them. 

Liquidation2

We’ve all seen multiple examples of it on social media especially, people will gleefully share false news and images that a simple check of the BBC or other reputable news site could tell them is not true. 

Received wisdom and advice can be harder to disprove than this so we find it annoying when we hear false and wrong advice passed off as something credible. 

One example we’re sadly hearing a lot about recently is the idea that companies with debts, including bounce back loans, business rates and VAT arrears, can simply dissolve themselves and these obligations away into thin air. 

Usually sensible people have been taken in by this one in particular - we even had a good client ask us “why should I pay for my company’s liquidation? Can’t I get it for free if it’s struck off?”


Why are businesses with outstanding bounce back loan borrowing being stopped from closing down?


The main reason why you should consider a voluntary liquidation rather than a strike off is because of the directors investigation aspect. 

The liquidator has to investigate the conduct of the directors in the lead up to the liquidation as a mandatory part of the process but if you have done everything in your power to keep the business running and have kept your records in good order then you’ll have nothing to worry about. 

Even if, in hindsight, you’re worried about how a couple of your decisions and actions might be viewed, you can explain the circumstances and rationale to the liquidator and if you can provide supporting evidence, they will be quite likely to accept your version of events and say so in their report to HMRC. 

The same doesn’t apply for directors who try to strike off or dissolve their company with outstanding debts - whether they be bounce back loans, CBILS, VAT arrears or other tax payments they owe. 

The rules about striking off are very strict and explicit - no company with debts can be struck off. 

But this doesn’t stop some unscrupulous business owners from trying to dissolve the firm to avoid their obligations - or honest directors that have received some bad advice and been told that this is possible.

There’s a new law making its way through parliament at the moment - the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill - that will give dishonest directors some pause for thought. 

Right now director disqualifications can be implemented for clear offences such as falsifying records and taking money out of an insolvency business. 

Any attempt to defraud HMRC by deliberately avoiding paying bounce back loan debts for example, would also very likely lead to disqualification.

The HMRC have held their fire considerably during the pandemic and subsequent lockdown periods because of the unique situation a lot of otherwise viable and profitable businesses found themselves in.

Things are changing as more industries begin to trade without restrictions, HMRC and The Insolvency Service will also be moving up the gears to begin recouping some of the historic levels of support paid out. 

One way they will do this is by using new powers given to them by the bill that allows retrospective investigations and actions to be taken against directors for the first time if they’re found to have dissolved their company with outstanding debts. 

Company strike offs and dissolutions will be examined to see if any were carried out with outstanding debts and if discovered could lead to punishments including fines, disqualifications of up to 15 years and personal financial liability to settle the debts placed on the directors. 

Business Secretary Kwasi Kwarteng said: “We need to restore business confidence and people’s confidence in business. 

“This is why we won’t hesitate to disqualify directors who deliberately leave employees and taxpayers out of pocket. Extending powers to investigate directors of dissolved companies means those who have previously been able to avoid their responsibilities will be held to account.” 

Chris Horner, Insolvency Director with Businessrescueexpert.co.uk, sets out the likely scenario.

“The new legislation is clearly aimed at those directors who thought they’d be clever and try to dissolve their companies to avoid paying their creditors - including HMRC.

“Directors who’ve done the right thing and liquidated their companies voluntarily through a creditors voluntary liquidation (CVL) or other process don’t have anything to worry about from the bill. 

“Dissolution or striking off a company is a cheap and efficient way of closing a dormant or debt free business and thousands of businesses do it every year. 

“It’s the small minority of directors who thought it was a great way to dodge their debts that should rightly be dreading a letter, email or increasingly possible from the end of September - a knock at the door. 

“An important point to make for businesses that legitimately took out bounce back loans or CBILS borrowing is that they aren’t HMRC’s primary target either.

“ As long as they have kept records and documentation or other evidence that supports their explanations on how the money was used, why they borrowed it, how their business functioned during the pandemic then they can be confident that they can answer any questions fully and convincingly. 

There are several other good reasons why you should be happy to liquidate your business voluntarily:

You can take advice and pick the insolvency practitioner choice of your choice to oversee the process and guide you through the issues and requirements. 

If a company goes into liquidation any personal guarantees directors have given on debt will crystallise - becoming payable immediately. A liquidator will help you create a plan to deal with this situation. Similarly, a liquidator has a duty to recover any funds owing from overdrawn directors loan accounts and can advise ahead of time the best course of action to deal with this eventuality.

A liquidator can advise on the redundancy procedure for existing staff and/or the transfer of existing staff to a new business (TUPE). 

One often overlooked but important detail is that directors who have been paid via PAYE are also eligible for redundancy payments. 

The liquidator can advise the best way forward to access what could be some vital income - especially as it may be possible to use it to finance the liquidation process with the proceeds.

There are a lot of things that have to be done correctly in a liquidation and it can be easy to lose track of them, especially if your attention is being pulled in several different directions. 

The liquidator will keep you on track of what needs to be done, how and when including the sale of assets, transfer of leases and several other requirements.

Topics such as liquidation and dissolution can be stressful at the best of times but even more so when sanctions such as disqualification and being made personally liable to repay any debts your company was closed down inappropriately or deceitfully. 

The vast majority of businesses that have closed down in the past two years have nothing to worry about. They did their duties to the best of their ability and made the difficult but ultimately correct decisions to close their companies down.

Several others might now be in a similar position and are nervous that although the correct decision is to liquidate the business, this wouldn’t be the end of matters for them or the company. 

We can reassure them in one conversation. 

After a free initial consultation with one of our expert advisors, directors will have a far clearer idea of what options they have to close or restructure their companies, the costs involved and what the likely timescales will be. 

Then, for the first time in a while for many, they will finally be able to see an end to their problems and be able to think of new beginnings instead. 

Bullring

They recently announced that trading at its out-of-town retail parks was almost back to pre pandemic levels and that as a result rent collection had improved across its portfolio. 

This is encouraging as footfall and sales at their covered shopping mall properties remain at 75% and 89% of 2019 respectively. 

Despite rent falling sharply during the pandemic and lockdown periods, British Land collected 85% of the £87 million due in rent during the June quarter, up from 72% collected in December. They received 91% of rent due in the March quarter so industry experts will be watching the September take closely. 

The company has already informed tenants that “with trading restrictions substantially lifted and the vast majority of our customers trading well and paying the rent due, we do not expect to make further concessions this quarter”.

There will be no more rent concessions or write offs forthcoming from Hammerson either. 

The owners of the Birmingham Bull Ring and Brent Cross shopping centre in London have also warned tenants that “all avenues to collect rents due are being pursued.”

They said they had waived, written off or not collected £26 million of rent due in 2020 and £15 million due so far for 2021. 

This contributed to their only collecting 62% of the £154 million due in total rent this year and still have 11% of their annual £264 million rent take outstanding from last year. 

“Many retailers continue to report high sales and conversion rates as visitors shop with purpose”, Hammerson said.  

Commercial tenants who owe outstanding rent should expect that their landlords will also act with purpose from September onwards to recoup outstanding debts once the restrictions on creditor recovery actions ends on the last day of the month. 


Why are businesses with outstanding bounce back loans being stopped from closing down?


The announcements come ahead of news that the government is planning to bring forward new insolvency legislation aimed at protecting businesses from accrued debt and rent arrears as a result of the pandemic. 

A policy paper has been published with new provisions that will ringfence rent arrears caused by “enforced closures” and introduce a process of binding arbitration between landlords and their commercial tenants. 

The British Property Federation (BPF) reported that UK businesses had built up a combined £7.5 billion of commercial rent arrears up to June 30 2021 due to the overall impact of Covid-19.

According to the published guidance, the new provisions will be a backstop or a last resort to be used where landlords and tenants haven’t been able to settle a dispute and come to a mutual settlement on how rent arrears will be paid. 

They will be published before any system is put into law to give landlords and tenants the necessary time and motivation to negotiate. 

A spokesperson said: “As soon as legislation is passed, the commercial tenant protection measures will only apply to ring fenced arrears. This includes rent debt accrued from March 2020 by commercial tenants affected by Covid-19 business closures until restrictions for their sector are removed.

“This means that landlords will still be able to evict tenants for the non-payment of rent prior to March 2020 and after the end of restrictions for their sector and who have not been affected by business closures during this period.”

The new rules will come in addition to the amendment to Section 82 of the Coronavirus Act 2020 which prevents landlords of commercial properties from evicting tenants for the non-payment of rent until March 25 2022.  

This is also the date when the suspension of Commercial Rent Arrears Recovery (CRAR) is also due to expire. 

Landlords are being prevented from using CRAR unless the tenant owes 554 days’ rent by June 24 2021 but this amount may change once the restriction lapses.

In reality, all of this means that it’s a return to normal contractual arrangements under the terms of the signed lease for tenants that are able to pay their rent arrears in full and weren’t affected by closures. 

It also stipulates directly that it doesn’t include any debts accrued outside the ring fenced period. 

The aim of the arbitration is to be an “impartial and manageable process” and a faster or easier alternative to going through the courts.  The government does expect that landlords and tenants both contribute to the cost of the arbitration if they are both found to have negotiated in good faith.

The arbitrator will also have the power to award the whole cost of arbitration to one side if they find the other party has not been entering into the spirit of the agreement. 

So we know the roadmap and what’s going to happen but what is the situation for businesses with rent arrears now?

In short, the government expects companies that are open and trading normally to pay their ongoing rent in full according to their lease terms.  If they’ve agreed different conditions with their landlords then they should stick to them - normal operation periods are not covered under the new rules. 

To help their case, and avoid any doubt, if tenants have any arrears covered by the ringfenced period, they should state in writing to their landlord what time period payments they make should be apportioned to. 

Landlords can charge interest on rent incurred from the end of the ring fenced period onwards if interest payments are included in the lease terms. Also if the tenants breach any other lease terms which could give rise to forfeiture (e.g. property damage) then the landlord is still able to evict them on that basis.


Can a landlord enforce rent arrears at the moment?

Even though the legislation is on its way, don’t think that landlords are powerless to bring enforcement action against delinquent tenants. 

They still have a range of options available to them including:-

The ultimate aim of the legislation is to help viable businesses continue to trade their way back to profitability and pay off any rent debts or arrears that are genuinely down to the pandemic.  

Some landlords and tenants had already made agreements on rents but there are always some who can’t or won’t reach a compromise which the arbitration will help move to a conclusion.

There will be others who suspect that the moratorium on evictions is being used as an unfair tool to avoid paying rent and that it will give them the necessary leverage to definitively resolve the outstanding situation.  

One area where there could be clearer indications of intent from the government is how businesses in sectors which moved between trading restrictions during the pandemic will be treated. 

This includes non-essential retailers and eat-in restaurants that were subject to restrictions but were still able to trade such as if the restaurant offered a takeaway or pick-up meal delivery service.

Like any new legislation, expect it to be tested by individual circumstances early after it’s rolled out. 


Rent arrears, like unpaid bounce back loans and outstanding business rates debt, might seem like an immovable object against the irresistible force of a landlord eager for repayment but if you can’t go through a problem, you can always go around it. 

Unmanageable debt built up during the pandemic might appear to be a terminal issue but it needn’t be. 

Once you get in touch with us to arrange a free initial consultation, we can help you take stock of your situation and plan a manageable and achievable forward roadmap to follow. 

Whether it’s to create a restructuring and rescue plan that would be acceptable to your creditors or if an orderly liquidation is the only way forward - we can explain all the options and steps needed to bring you and your business to their next stage.

Train

The bounce back loan scheme was a success for many of the businesses who took them out. 

They helped them to keep trading or to support themselves and their employees whilst locked down and unable to function normally. 

The final official borrowing figures released by the government earlier this year showed that over 1.5 million bounce back loans had been granted for a total of £47 billion - all guaranteed by the government. 

Over 44,000 north east businesses took part in the scheme, borrowing an average of £26,751 each or £1.2 billion collectively - an amount equivalent to the cost of building fifty brand new stadiums the size of Sunderland’s Stadium of Light. 

27.5% of north east businesses, over one in four, applied for bounce back loan financing, which was the highest demand in the country. The average amount loaned however was the lowest amount - some £7,000 less on average than a London-based business which saves an average borrowing figure of £33,480 per loan - the highest average amount in the country.

Earlier this year, BusinessRescueExpert.co.uk conducted an investigation into the risk of defaults around bounce back loan borrowing done by businesses. 

In the North East they found that even under the official best-case scenario, approx. 15% of loans would remain uncollected. That would be 6,729 in our region - with a total of £180 million remaining unpaid.


Click here to use our exclusive interactive tool to see how businesses in your local parliamentary constituency have used recovery loans


At around the same time we published our results, the Department of Business, Energy and Industrial Strategy (BEIS) announced that they would begin to enforce bounce back loan debt recovery imminently but carefully. 

Business Secretary Kwasi Kwarteng wrote that: “HMRC would adopt a cautious approach to enforcement of debt owed to government that will have accrued” and that HMRC would soon update its enforcement methods so that any outstanding debt could be brought into managed arrangements for businesses affected by the pandemic and subsequent lockdowns. 

Specifically he said that using insolvency to enforce payment would remain a last resort and that he recognised that “the path back to full trading will be difficult for many companies, particularly those with accrued debt and low cash reserves.”

If BEIS are playing the good cop in this scenario then the Insolvency Service are playing the bad cop - promoting their recent successful attempts to wind up several limited companies that had been involved in fraudulent activity including dishonestly obtaining bounce back loans.

Dave Elliott, Chief Investigator at the Insolvency Service said: “The bounce back loan scheme was made available to help support businesses during the pandemic. 

“It’s outrageous that some directors have been trying to abuse this support, and the action we have taken shows we take this issue extremely seriously.”

Despite the tough talk, just how seriously are the authorities cracking down on bad bounce back loan behaviour by directors and business owners?

One growing trend we’ve noticed recently in the north east and elsewhere is where companies with outstanding bounce back loan arrears are attempting to dissolve their businesses, or have them struck off. 

Company dissolution is a perfectly legal method of closing a company but comes with a set of strict conditions

Dissolution is not an available tool if the company owes any money, including outstanding tax or a bounce back loan. 

New legislation, specifically aimed at unscrupulous directors, is due to become law later this year (but will apply retrospectively) and will be a big problem for those who’ve tried to close their company this way and avoid their legal responsibilities. 

The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill 2021 will allow the Insolvency Service to specifically target and pursue directors who close their companies by dissolving their businesses when they have outstanding debts.

One of the main new measures will see the Insolvency Service given retrospective powers to investigate directors of struck off companies and how they acted in the circumstances leading up to the dissolution. 

Being retrospective, directors of north east businesses dissolved not only in 2021 but within the past couple of years can expect to be contacted in the near future if they had bounce back loans or tax debt.. 

Directors of businesses with outstanding bounce back loan debts trying to dissolve their business from now on can reasonably expect to receive an “Objection to Company Strike Off Notice”.

This prevents the company from being struck off and will also be an invitation for any of their other creditors to register their objections to the striking off as well. 


Disqualification and fines

No system is 100% perfect so occasionally a business with outstanding debts slips through the net and is struck off.

What are the likely consequences facing directors who have managed to get their businesses struck off with bounce back loan arrears? 

In the first instance the Insolvency Service will be looking to disqualify any directors of companies who have allowed their business to be struck off when it has debt. 

The disqualifications will be for up to 15 years depending on the circumstances. The directors will also be personally liable for fines and any costs incurred.


State of play

So now you’ve got a better idea of what could happen - we thought we’d go one step further and find out what’s actually going on with dissolution objections right now. 

Businessrescueexpert.co.uk lodged an FOI inquiry with BEIS earlier this month to ask if they are actively filing objections with Companies House against businesses with outstanding bounce back loans that are looking to be struck off. 

We also asked on what legal basis these objections were being lodged under. 

BEIS confirmed that it is filing objections where “a strike off notice has been issued against a company which has an outstanding bounce back loan”. 

The legal authority allowing them to do so is contained within the Companies House strike off, dissolution and restoration guidance updated in March 2021. 


Liquidation - a proper alternative to striking off

Now we have official confirmation that dissolutions are being officially objected to - with the consequences we’ve outlined - what can worried north east directors do?

Bounce back loan repayments are falling due, and the last support measures and protections against creditor actions are being removed within weeks

All of this adds increased pressure to cash flows that are already squeezed to the limit as they try to manage all the outgoings with reduced income - if they’re able to trade without restriction once again.

If a business is genuinely unable to meet all of its obligations and liabilities including bounce back loan arrears then there is still one legal insolvency process they can follow that would allow them to close their company, settle their debts and move on to the next chapter of their career efficiently and effectively. 

Company liquidation, or specifically a creditors voluntary liquidation (CVL), is the best route for a business with outstanding debts including unpaid bounce back loans, to follow. 

Once they’ve engaged a licensed insolvency practitioner, they will immediately take over all dealings with creditors and work through the rest of a businesses debts to compile a full picture of who is owed and how much. 

Chris Horner, insolvency director with Businessrescueexpert.co.uk, said: “Our FOI inquiry has proven that HMRC are treating improperly dissolved and dissolving companies as their highest priority, which should effectively close off this avenue for directors looking to close down their businesses. 

“We can expect to see more compensation orders being used to make directors personally liable for the debts of their struck off businesses if the Insolvency Service believe they’ve been done incorrectly or to evade oversight.

“Another common misunderstanding about bounce back loans is that because they are underpinned by government guarantee, they won’t be chased by lenders. They will. 

“The lender will try to secure repayment for at least 12 months as standard as a condition of reimbursement because they will have to show the government they tried to recover the funds they lent. 

“They probably won’t start insolvency proceedings just for bounce back loan debt but when restrictions are lifted at the end of September they could use debt collectors and bailiffs to enforce repayment. 

“If a business chooses to liquidate instead then the bounce back loan will be treated as any other unsecured debt and if the directors have fulfilled their duties to the best of their abilities, then the lender will ultimately be repaid by the government.

“The most important thing any business in the north east or anywhere else that’s having difficulties repaying any debts, including bounce back loans, can do right now is to get professional insolvency advice

“The rules literally change at the end of September so if they use this time constructively to protect themselves and their business financially and legally, they could already have moved onto their next venture by the time this happens.”

HMRC

 

The bounce back loan scheme was a success for many of the businesses who used it to help them to keep trading or to support themselves and their employees whilst lock down was in effect. 

The final official borrowing figures released by the government showed that over 1.5 million bounce back loans had been granted for a total of £47 billion - all guaranteed by the government. 

Earlier this year, BusinessRescueExpert.co.uk conducted an investigation into the risk of defaults around bounce back loan borrowing and found that even the official best-case scenario would see nearly 230,000 loans remaining unpaid for a total of £6.9 billion - or the equivalent of building six new stadiums the size of Wembley.

At around the same time the Department of Business, Energy and Industrial Strategy (BEIS) that they would begin to enforce bounce back loan debt recovery imminently but carefully. 

Business Secretary Kwasi Kwarteng wrote that: “HMRC would adopt a cautious approach to enforcement of debt owed to government that will have accrued” and that HMRC would soon update its enforcement methods so that any outstanding debt could be brought into managed arrangements for businesses affected by the pandemic and subsequent lockdowns. 

Specifically he said that using insolvency to enforce payment would remain a last resort and that he recognised that “the path back to full trading will be difficult for many companies, particularly those with accrued debt and low cash reserves.”

If BEIS are playing the good cop in this scenario then the Insolvency Service are playing the bad cop - promoting their recent successful attempts to wind up several limited companies that had been involved in fraudulent activity including dishonestly obtaining bounce back loans.

Dave Elliott, Chief Investigator at the Insolvency Service said: “The bounce back loan scheme was made available to help support businesses during the pandemic. 

“It’s outrageous that some directors have been trying to abuse this support, and the action we have taken shows we take this issue extremely seriously.”

Despite the tough talk, just how seriously are the authorities cracking down on bad bounce back loan behaviour by directors and business owners?


One growing trend we’ve noticed recently is where companies with outstanding bounce back loan arrears are attempting to dissolve their businesses, or have them struck off. 

Company dissolution is a perfectly legal method of closing a company but comes with a set of strict conditions. It is not an available tool if the company owes any money, including tax or a bounce back loan. New legislation, specifically aimed at unscrupulous directors, is due to become law this year (but will apply retrospectively) and will be a big problem for those  who’ve tried to close their company this way and avoid their legal responsibilities. 

The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill will allow the Insolvency Service to specifically target and pursue directors who close their companies by dissolving their businesses when they have outstanding debts.

One of the main new measures will see the Insolvency Service given retrospective powers to investigate directors of struck off companies and how they acted in the circumstances leading up to the dissolution. 

Being retrospective, directors of businesses dissolved not only in 2021 but within the past couple of years can expect to be contacted in the near future if they had bounce back loans or tax debt.. 

Directors of businesses with outstanding bounce back loan debts trying to dissolve their business from now on can reasonably expect to receive an “Objection to Company Strike Off Notice”.

This prevents the company from being struck off and will also be an invitation for any of their other creditors to register their objections to the striking off as well. 


Disqualification and fines

No system is 100% perfect so occasionally a business with outstanding debts slips through the net and is struck off.

What are the likely consequences facing directors who have managed to get their businesses struck off with bounce back loan arrears? 

In the first instance the Insolvency Service will be looking to disqualify any directors of companies who have allowed their business to be struck off when it has debt. The disqualifications will be for up to 15 years depending on the circumstances. The directors will also be personally liable for fines and any costs incurred. 

State of play

So now you’ve got a better idea of what could happen - we thought we’d go one step further and find out what’s actually going on with dissolution objections right now. 

Businessrescueexpert.co.uk lodged an FOI inquiry with BEIS earlier this month to ask if they are now filing objections with Companies House against companies with outstanding bounce back loans that are looking to be struck off. 

We also asked on what legal basis these objections were being lodged under. 

BEIS confirmed that it is filing objections where “a strike off notice has been issued against a company which has an outstanding bounce back loan”. 

The legal authority allowing them to do so is contained within the Companies House strike off, dissolution and restoration guidance updated in March 2021. 

Liquidation - a proper alternative

Now we have official confirmation that dissolutions are being officially objected to - with the consequences we’ve outlined - what can worried directors do?

Bounce back loan repayments are falling due, and the last support measures and protections against creditor actions are being removed within weeks

All of this adds increased pressure to cash flows that are already squeezed to the limit as they try to manage all the outgoings with reduced income - if they’re able to trade without restriction once again.

If a business is genuinely unable to meet all of its obligations and liabilities including bounce back loan arrears then there is still one legal insolvency process they can follow that would allow them to close their company, settle their debts and move on to the next chapter of their career efficiently and effectively. 

Company liquidation, or specifically a creditors voluntary liquidation (CVL), is the best route for a business with outstanding debts including unpaid bounce back loans, to follow. 

Once they’ve engaged a licensed insolvency practitioner, they will immediately take over all dealings with creditors and work through the rest of a businesses debts to compile a full picture of who is owed and how much. 

Chris Horner, insolvency director with Businessrescueexpert.co.uk, said: “Our FOI inquiry has proven that HMRC are treating improperly dissolved and dissolving companies as their highest priority, which should effectively close off this avenue for directors looking to close down their businesses. 

“We can expect to see more compensation orders being used to make directors personally liable for the debts of their struck off businesses if the Insolvency Service believe they’ve been done incorrectly or to evade oversight.

“Another common misunderstanding about bounce back loans is that because they are underpinned by government guarantee, they won’t be chased by lenders. They will. 

“The lender will try to secure repayment for at least 12 months as standard as a condition of reimbursement because they will have to show the government they tried to recover the funds they lent. 

“They probably won’t start insolvency proceedings just for bounce back loan debt but when restrictions are lifted at the end of September they could use debt collectors and bailiffs to enforce repayment. 

“If a business chooses to liquidate instead then the bounce back loan will be treated as any other unsecured debt and if the directors have fulfilled their duties to the best of their abilities, then the lender will ultimately be repaid by the government.

“The most important thing any business having difficulties repaying any debts, including bounce back loans, can do right now is to get professional insolvency advice

“The rules literally change at the end of September so if they use this time constructively to protect themselves and their business financially and legally, they could already have moved onto their next venture by the time this happens.”

VAT

According to statistics released last month as part of a wider FOI release, 156,000 businesses out of 590,000 that took advantage of the VAT deferral offered between 20 March and 30 June 2020 have failed to get in touch with HMRC. 

They have not repaid any money owed even though the deadline to either repay in full or arrange a repayment plan passed on 30 June 2021. 

The total amount of outstanding tax was £2.7 billion of which 9% was made up of VAT deferrals. Additionally £17.8 billion of VAT has been repaid and another £13 billion is due through agreed monthly instalments. 

The VAT Deferral New Payment Scheme was set up to allow businesses to self-serve by spreading their deferred VAT payments by up to 11 equal monthly instalments, interest and penalty free. 

An HMRC spokesperson said: “Businesses had up to 30 June to make arrangements to pay deferred VAT, so those who failed to take action should contact HMRC to pay what they owe. 

“They may still be eligible to receive support with their tax affairs through our Time to Pay service. These arrangements are agreed purely on a case by case basis and tailored to individual circumstances and liabilities.”

Now, HMRC will begin their efforts to reclaim as much outstanding VAT debt as possible and will make every effort to do so. They have begun by announcing that any business that fails to get in touch to arrange a payment plan for their overdue VAT payments will face penalties of 5% of the money owed plus interest. 

The next step usually involves bailiffs and other direct debt enforcement measures. 


How will HMRC handle bounce back loan arrears and debt?


Chris Horner, Insolvency Director with Businessrescueexpert.co.uk, said: “In our years of experience, we know that HMRC are not happy when businesses ignore their liabilities - whether they’re behind on VAT payments or have bounce back loan debt they can’t repay.

“They have no problem letting their debt management unit loose to enforce and secure debts - especially if the owners or directors haven’t been in touch with them. Even before the pandemic, HMRC was the most tenacious and committed creditor any business could face.  

“Now the government has a real vested interest in recovering owed debt - whether it be VAT, outstanding bounce back loans or CBILS borrowing - HMRC will be happy to be seen to be leading the crusade. 

“Usually HMRC can be negotiated with if a business approaches them to let them know they will have difficulty making repayments. If HMRC come knocking themselves then time to pay arrangements are more difficult to negotiate and if there are significant liabilities involved then debtor companies should be prepared to face the prospect of court action and subsequent penalties. 

“Additionally, HMRC has also recently been granted new powers to make directors and members of businesses personally liable for debts where there’s a risk the business will fold so it’s even more important than ever for business owners or directors to get advice if they are in this position.” 


Explainer - What is VAT?

VAT - or Value Added Tax - is paid by any UK business if their taxable turnover exceeds or is expected to rise above £85,000 in any 12 month period. 

If a business reaches this threshold then they have to become VAT registered although any business generating less than this can register if they choose to.  

VAT registered companies have to submit regular VAT returns so HMRC can estimate how much is owed. Returns can be submitted electronically every quarter unless the company applies for dispensation to file them manually.  

It’s important to gain this as filing paper returns without express prior permission incurs an automatic £400 fine.  

VAT returns must also be filed within one calendar month and seven days of the end of an accounting period - and the deadline for paying any VAT owed in full falls on the same date. 


What are surcharge periods and notices of assessment?

One of the things we take pride in is cutting through jargon and official terms to try and explain - in plain English - what things mean. 

With VAT, there are one or two confusing terms that crop up with regularity so we’ll do our best to go through them. 

If a business is late or non-compliant in paying VAT by the deadline, or they dont pay in full then their account is said to be in default and they may enter a surcharge period. 

This lasts for 12 months and adds penalty charges for future defaults based on a percentage of the outstanding VAT amount owed - although the business is not issued with a penalty for its first VAT default. 

If further defaults occur during the surcharge period then the percentage increases with each occasion and the initial 12 month surcharge period will be extended each time it happens. 


Act now to save your business because everything changes next month


If a company fails to submit their VAT return on time or pay the amount due then HMRC will send a VAT notice of assessment of tax. 

This is a summary of what HMRC believes should be due in VAT. 

On receipt of a notice of assessment, a business has a couple of options. 

They can send a completed VAT return and pay any owed amount; they can notify HMRC within a 30 day window if they believe the estimate is too low and produce an accurate and corrected VAT return and associated payment. 

This is important to get on top of because a company could receive a penalty for willingly paying an assessed amount they know to be lower than it should be. 

If the assessed amount is greater than you believe it should be, unfortunately there is no appeal procedure. The business should submit an accurate VAT return and pay the exact amount due. 

A business should always submit a quarterly VAT return even if it can’t afford to pay the due VAT. This shows HMRC that they are complying with requirements they can meet and prevents an excessive notice of assessment being issued. 

Not being able to pay VAT payments, PAYE arrears, bounce back loan arrears or any other debts when they come due might be a sign of a bigger issue - that the company might be insolvent or might inadvertently be guilty of wrongful trading

The most important thing to do in this situation is not to panic but to calmly get in touch with us to arrange a free initial consultation

We will go through your predicament with you in detail to understand what has transpired so far, where the business is and will report back with the options you have quickly. 

We have negotiated with HMRC on countless occasions and know that they prefer honesty and transparency. 

We do too because this will give you more room to maneuver and chance to turn things around than you might think you have. 

Our experience also tells us that the sooner you act, the better it is for everyone.

So while business continues whether you’re on holiday or not, it’s a good time to look back on what’s happened to businesses in the second quarter of the year - that covers data from April 1 to June 30 2021. 

The Insolvency Service have published their second quarterly bulletin of the year revealing the total number of company insolvencies reported during this period and they show another uptick in insolvency activity.

Q2 insolvency stats 2021

When you look at the story of 2021 so far it resembles a giant V - recovering the numbers lost in the previous quarter. 

The overall number of company insolvencies for England and Wales from April to June 2021 was 3,116 - 31% higher than the previous three months data and 4% higher than the same period in 2020. 

This is also the highest quarterly total since the beginning of the pandemic. 

The main driver is the increase in creditor voluntary liquidations (CVLs)

Every other company insolvency procedure - administrations, CVAs and compulsory liquidations - was lower both in the previous quarter and the same quarter of the previous year. 

Q2 2021 (dark) v Q1 2021 (light)
Q2 2020 v Q2 2021

The 3,116 recorded company insolvencies was made up of:

CVLs made up 90% of insolvency cases in England and Wales between April and June this year with administrations taking 5% of cases; compulsory liquidations reached 3% and only 1% of cases were CVAs. 

There were a total of 165 company insolvencies in Scotland in Q2 2020, Up 91 or 32% higher than a year ago. This was made up of:

In Northern Ireland there were 23 company insolvencies, Up 15 or 35% higher than Q2 2020. This was comprised of:

The total company insolvencies for the UK for Q2 were 3,304 - an increase of 814 from the first three months of the year.

The Insolvency Service reiterates that the historic low levels of company insolvencies compared to pre-pandemic numbers are due to several factors - some temporary while others might be more influential in the medium to longer terms. 

Along with the unprecedented and historic level of government back financial support measures such as the bounce back loan scheme, suspensions of creditor recovery actions such as winding up petitions and a backlog of cases working through a court system that is still working someway below capacity have all had an influence. 

Additionally, the introduction of the Corporate Insolvency and Governance Act 2020 brought in new legal powers including a statutory insolvency moratorium period and court sanctioned restructuring plans. 

Since the introduction of the act on 26 June 2020, there have been five companies obtaining a moratorium and a further nine that had their restructuring plans approved and implemented by the courts. These measures are noted by the Insolvency Service but are not included within the statistics as they are not classed as formal insolvency processes. 


Liquidation Rates
q2 2021 liquidation rates

The liquidation rates figures (a number per 10,000 active companies) tends to give us a clearer picture of the broader trends at work as they indicate the probability of a company entering liquidation rather than the number that actually have. 

They are immune to one-off fluctuations or other factors and are more comparable over longer time periods than absolute figures. They indicate underlying trends affecting businesses so we can have a broader view of the direction of insolvency momentum. 

The figure is calculated based on the data from a 4-quarter rolling rate per 10,000 active companies so the rates for Q2 2021 used data covering the periods from Q3 2020 to and including Q2 2021. 

The liquidation rate for this period is 25.9 per 10,000 companies or 1 in 386 companies being liquidated in the 12 months ending on June 30 2021. 

This figure is slightly higher than the previous quarter (25.3 per 10,000 or 1 in 396 businesses) but lower than the corresponding figure from Q2 2020 (36.9 per 10,000 or 1 in 271).


If HMRC are getting serious about your bounce back loan debt - what can you do next?


Insolvencies by industrial sector
q2 insolvency by industry

Compared to the same time period a year ago, every industrial sector has seen a decline in insolvency rates

The three industries that saw the highest number of insolvencies were:

The construction industry continues to have a larger number of insolvencies than any other sector but the total number in the past 12 months is 36% lower than the previous period. 
 
Colin Haig, President of R3, the insolvency and restructuring trade body said: “The increase in corporate insolvencies - to the highest total in 18 months - has been driven by a rise in creditors voluntary liquidations (CVLs) which have increased to pre-pandemic levels. 

“It’s hard to say what’s driving this increase in CVLs but it could be that directors of a number of companies have decided they can no longer go on trading as a result of the pandemic, and are opting to close down their businesses by using the CVL process, before the situation deteriorates further.

“What is clear is that the figures show the toll the challenges of the last three months - and the twelve before them - have taken on the business community. 

“While many business owners were hoping the lifting of the lockdown would help them, they reopened amid low consumer confidence, a time when people were being encouraged to stay local, and when the economy was still a long way from recovering from the start of the pandemic. 

“The formal end of lockdown may have improved their situation but it wasn’t the boost many businesses had hoped for. 

“However, the government’s support measures have remained in place over this period and are likely the reason why today’s increase isn’t as severe as it could have been. 

“This support has been a lifeline for many businesses, but with the end of furlough in sight, directors now need to take the time to plan for how they’ll manage when this initiative ends.”


Is this summer your last chance to save your business?


The key takeaway from these latest statistics is that despite government support still being largely in place through the coronavirus job retention scheme and statutory demands,  winding up petitions and other enforcement measures remaining suspended, company insolvencies have increased relatively sharply. 

Bounce back loan repayments are coming due, business rates liability is due to resume and as the remaining support measures are finally wound up and creditors are within sight of being able to take unrestricted action once more, it’s reasonable to assume that by the end of the year if not Q3, these figures will be higher still.

So what can an informed and responsible business owner or company director do - right now - to help their company through the turbulent next few weeks and months?

How about talking? 

A problem shared might not be halved but getting in touch with us to arrange a free initial consultation chat will feel like a weight is lifted. 

Once we get a better understanding of your unique circumstances, we’ll be able to advise you on what strategic and tactical steps you can take in the short and medium terms to bolster your business. 

As the figures are beginning to show, not every company will be able to navigate the storm ahead but there are other options available that we can discuss that could lead to an alternative and ultimately better outcome than trying to rescue an unviable enterprise. 

By the time Q3 ends on September 30, many business owners will wish they had extra time available to tackle their most pressing issues. 

Make sure you use yours now. 

June 2020 insolvency stats

For England and Wales, the total number of corporate insolvencies for June was 1,207 - up 196 from the 1,011 recorded in May - a rise of 16%.

By way of comparison to the same period 12 months ago - these figures are 63% higher than June 2020 but remain 18% lower than a pre-pandemic June 2019. 
  
The upward trend is the first consecutive monthly rise since October and November 2020. Those figures might have been expected to climb for a third month in a row if it hadn’t been for the third lockdown initiated in December 2020

Although compulsory safety measures such as mask wearing and social distancing have been discontinued since July 19th, the number of Covid-19 cases continues to rise across the country at levels greater in some areas than last Autumn which directly preceded another lockdown. 

With support measures due to be fully withdrawn at the end of September and creditor actions such as statutory demands and winding-up petitions being reintroduced at the same time, insolvency statistics could begin to rise at a faster rate from October onwards.

The 1,207 company insolvencies in England and Wales consisted of 1,116 creditors voluntary liquidations (CVLs); 38 compulsory liquidations; 39 administrations and 14 company voluntary arrangements (CVAs). There were no receivership appointments in June. 

The only category that saw an increase on the previous month are creditor voluntary liquidations which are up by half and while CVAs have remained at the same number, administrations and compulsory liquidations had both fallen. 

CVLs are the only insolvency category that was higher than its pre-pandemic equivalent, at their highest recorded level since March 2019, with the rest down 60% or greater. 

Additionally, there were 77 company insolvencies in Scotland comprising 14 compulsory liquidations, 62 CVLs and one administration which was 67% higher year on year and 13% higher than in June 2019. 

This was the highest number of monthly insolvencies recorded since February 2020. 

Scottish company insolvencies tend to be driven by compulsory liquidations but since the advent of the first Covid-19 lockdown in March 2020, there have been nearly twice as many CVLs as compulsory liquidations - being the most frequent type of insolvency for 13 out of 14 months. 

There were also 11 company insolvencies registered in Northern Ireland - 22% higher than in June 2020 but 62% lower than June 2019. 

This was made up of one compulsory liquidation, nine CVLs and one administration.

The overall total of UK-wide company insolvencies for June 2021 is 1,295, an overall increase of 226 from last month’s collective total.


“Uneconomic to continue trading”

Christina Fitzgerald, Vice President of R3, the insolvency and restructuring trade body said: “The increase in corporate insolvencies between between May and June - to the third highest monthly figure since the pandemic started - has been driven by a rise in Creditors’ Voluntary Liquidations (CVLs).  

“The Government’s decision to delay lifting the final Covid-19 restrictions for another month has clearly been a further blow to the business community and may have been particularly unhelpful for the hospitality and retail sectors, which have been hit hardest by trading restrictions and lockdowns. 

“It may be that this impact has been reflected in June’s statistics as the rise in CVLs, used by directors to voluntarily close a company, suggests that for many directors the delay to the removal of the restrictions may have simply made it uneconomic to continue trading. 

“However, we are heartened by the Business Secretary’s recent comments on HMRC’s planned approach to working with distressed businesses. In particular, the news that HMRC will take a supportive approach to rescue proposals from viable businesses is welcome, and we hope will support the profession’s efforts to support Covid-19 hit firms. 


Summer is usually the time when people are looking at holidays and taking it easy so businesses will either be enjoying their slowest or busiest periods of the year depending on their location or industry. 

This year has once again proved that normal service is a long way from being resumed.

The one thing we can say with absolute certainty is that the specialist advice is as good an investment of time right now as anything. 

Whether it’s looking at making slight corrections to make a company more efficient and streamlined when demand picks up after the heatwave and home holidays dissipate, or looking at bigger restructuring or more drastic but necessary action - expert guidance is available here and now. 

We offer a free initial consultation where we can learn more about your immediate challenges and provide you with a range of effective and efficient options that can be implemented  to help any business get back on the right track. 

Business Rescue Expert is part of Robson Scott Associates Limited, a limited company registered in England and Wales No. 05331812, a leading independent insolvency practice, specialising in business rescue advice. The company holds professional indemnity insurance and complies with the EU Services Directive. Christopher Horner (IP no 16150) is licenced by the Insolvency Practitioners Association

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