Category: Business debt

Dealing with business debt

Get out of business debt

Escape business debt with a Company Voluntary Arrangement

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Once a business starts to experience cash flow problems debts can quickly become unmanageable, even if sales are good and ‘on paper’ the business is thriving. It only takes one credit customer or supplier who doesn’t pay on time, though, and your ability to pay your own debts is restricted.

This knock-on effect within a supply chain or industry can be very damaging, and is sometimes a precursor to full insolvency. It’s also a difficult situation to manage as a director, and a problem that might only be resolved with professional help.

We’re fortunate in the UK to have various procedures available in these circumstances, and one of these is the Company Voluntary Arrangement, or CVA.… Read more

Business liquidation

What liquidation means for UK businesses

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If you’ve been struggling to keep your company afloat, or have already reached the stage where it’s insolvent, you may be worried about what liquidation means for you and your business.

It’s certainly a challenging scenario. You have to deal with constant pressure from creditors, and this can prevent you from moving the business away from financial difficulty.

So what does liquidation mean in a practical sense, and how can it affect you as a company director?

What is business liquidation?

Liquidation involves selling business assets, and using the funds to pay creditors some of the money you owe. Unfortunately, the business must permanently close at the end of the process, which also means redundancy for any staff you employ.… Read more

Business debt

How to deal with serious debt as a UK limited company

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When a limited company is in financial difficulty, directors aren’t usually personally liable for the business’ debts. That’s because limited companies are separate legal entities, unlike sole traders, who can be pursued for payment through the courts.

Nonetheless, it’s a difficult situation when a company struggles financially, and if you’re a limited company director it’s important to understand your duties and obligations.

If the company is formally insolvent, you’re legally obliged to stop trading and prevent any unnecessary financial losses for your creditors.

If you don’t do this you could face allegations of wrongful trading, and potentially be held liable for business debts.… Read more

Getting behind with tax payments

Tax debt? How a Time to Pay Arrangement can help your business survive

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If your business has fallen behind with tax payments, there’s a procedure in the UK that could help you get back on track. HMRC’s Time to Pay arrangement, or TTP, is an extremely useful fallback when you’re dealing with short-term financial difficulties.

HMRC take stringent measures against businesses they believe are deliberately avoiding payment, so it’s important to contact them quickly to explain your situation and demonstrate your resolve in paying the arrears.

So what exactly is a Time to Pay arrangement, and how does it work in practice?

What is a Time to Pay arrangement?

HMRC tax payments

A Time to Pay arrangement is a payment plan that reschedules your unpaid liabilities to HMRC.… Read more

Small business debt

Sole Trader Debt: 5 Effective Solutions

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It can be difficult to escape sole trader debt, as you’re personally liable for the debts of your business and don’t enjoy the limited liability that’s available to company directors. This means your assets, including your home, are at risk if you’re unable to pay suppliers, tax liabilities, or staff.

Your personal credit rating is also affected when you get into business debt. This can severely limit future borrowing as any defaults or formal debt procedures that you enter remain on your credit file for six years.

Escaping sole trader debt

You can escape serious debt in various ways as a sole trader.… Read more