Help for Directors

All businesses face the occasional financial crisis but when they become a critical problem you need to know exactly where you stand. In our help for directors section, you will find specific information for answering your questions around if you are insolvent, what you need to do if you are and how it will affect you.

Creditors Voluntary Liquidation

What is known as Creditors Voluntary Liquidation is the process that most businesses must go through if they are insolvent. It can be a difficult time for everyone involved, so we have created this special section of our site to give you the important facts about CVLs in a clear and down to earth way so you can see where you stand.

Members Voluntary Liquidation

This is when your company is still solvent, but you (and your fellow directors) decide it is time to call it a day and retire or move on to the next stage of your lives.  With an MVL, you will release the assets and use these funds to pay off the creditors before returning the remaining funds to the shareholders.

HMRC arrears

HMRC arrears

The truth is that most companies that fail will have HMRC arrears and sometimes these can be substantial. HMRC arrears and insolvency, unfortunately, go hand in hand and when a business is having a hard time what you can do about tax, VAT and national insurance arrears are going to be question you need to address.

 

What can you do about HMRC arrears

If are having problems paying your debt to HMRC it is important that you contact them as soon as possible. They will probably try to help and whatever else you need to make them aware of possible problems with payment. If you don't, they will look less favourably on you in the future. So if you owe money to HMRC...

  • Contact them immediately to discuss it with them
  • Look for a time to pay arrangement
  • Make sure you understand your current financial situation so you know what you can pay and when
  • Your future tax and other debts will still come due, so take these into account

If you feel that a longer payment may be required, you may need to look at a Company Voluntary Arrangement (CVA). Click here for a more comprehensive look at dealing with HMRC debt.

What action can HMRC take because of debts?

In short, HMRC has a range of actions they can take from chasing through to winding up a business. They will usually give you fair warning and they are quite understanding if you are having problems, but in the end, they will try to collect in any way within their power. They could:

  • Pass your debt to a collection agency
  • Take control of your assets
  • Take funds directly from your bank
  • Ask the court to enforce the debt and send a bailiff
  • Petition to wind up the company

As you can see it is really important to deal with any debt to HMRC as they can take some quite serious actions if you don't. Click here for full guidance on the actions HMRC can take if you owe them money.

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If you think your business may be insolvent it is important to get help as soon as possible

Call us for a free initial discussion 

Leicester: 0116 232 5117 | Warwick: 01926 671 891 | Coventry: 02476 017 639 | Northampton: 01604 263 179