Tuesday, 28 August 2012

Fewer Directors Being Made to Account for Their Actions

A recent report by R3, the Insolvency Trade Body has warned that a shortage of resources at the Insolvency Service has meant that unscrupulous company directors are escaping any action against them. 

Only 1,151 of 5401 reports (21%) sent by Insolvency Practitioners to the Insolvency Service resulted in a disqualification court order or undertaking, the administrative equivalent. This compares with 27% last year and 45% ten years ago. 

R3’s president, Lee Maning said “it is not apathy at the Insolvency Services it is lack of resources. We are reporting “misconduct” and the authorities aren’t acting. Later on, it results in new victims that could have been protected if it wasn’t for the lack of resources. Justice needs to be seen to be done.”… “We need to push up the disqualification rates and make sure those who have been disqualified stick to their terms if we are to maintain public confidence.” 

Tim Corfield said “These comments reflect our experience at Griffin & King and an issue we have been highlighting for some time”.

Written by Tim Corfield


Sunday, 19 August 2012


We are now being told that better than expected construction figures may well mean that the second quarter GDP figures published last month will be revised upwards. The Office for National Statistics (ONS) reported last month that the economy shrank by 0.7% and based on this more recent data this may well now be revised upwards to 0.5%. 
The initial estimate was based partly on the assumption that construction output fell by 5.2% but now more data has been analysed, the ONS believe that the reduction was only 3.9%.
The ONS admits that much of the data gathered for the second quarter was a ‘best guess’. It bases its initial estimates solely on a monthly survey of 44,000 businesses covering the production, manufacturing, services, retail and construction industries. It polls firms of all sizes, but admits that those with fewer employees are less likely to be included – meaning that small fast growing businesses would be excluded from the calculation.
By the time the preliminary estimate is released, the ONS will have around 70%to 80% of responses back from its survey covering the first two months of the quarter (April and May) but for June the responses received is only around 20% to 30% and the ONS fill in the gaps based on historical data and a lot of assumptions.
The ONS admits that the bad weather and extra bank holiday made the estimate ‘more challenging’! These figures are unlikely to be fully revised for up to five years by which time who will care! Are we really to believe that Spain’s economy declined by 0.4% while the UK’s economy was down by 0.7%?
Tim Corfield commented “Given the political turmoil that these figures can produce and influence on business wouldn’t it be better to hold fire with producing figures that could indicate the wrong trends? Sending out the wrong signals could be damaging for the economy.” 
Andrew Sentence (a former member of the Bank of England’s monetary policy committee) has called for the ONS to include broader data including employment information. He commented “What the ONS is not very good at is taking a common sense view of economic data. They need to be much better at cross-checking technical data to give a true picture.”

Written by Tim Corfield


Financial Pressures Hitting the Older Generation Harder

The latest available data from The Insolvency Service shows that while the 35-44 year old range has the largest number of individual insolvencies, the 45-54 year old group had leapt from representing fewer than 15% of individual insolvencies a decade ago to making up 25% in 2011. 

The older generations are now being hit harder by insolvency and the number of individual insolvencies for over 55’s increased between 2009 and 2011.

Tim Corfield commented “The impact of insolvency on an older person is much greater. Younger people have a much better opportunity to start again and psychologically won’t have felt such an impact of losing everything. It’s much more difficult for older people to re-train and re-enter the job market even though they may well have great skills to compliment any business or workplace.”…“I am seeing many more situations where the younger generation are now supporting the older generation rather than the other way around.”

The good news is that the overall number of personal insolvencies has fallen from 135,089 in 2010 to 119,031 in 2011.

Written by Tim Corfield

Sunday, 5 August 2012

Tax Incentives Point the Way

The identities of the companies are not all known but publishers UBM and Advertisers WPP are believed to be among the names. 

A treasury spokesman said the tax change was part of a package designed to create “the most competitive tax system in the G20”. …”at the budget this year, we cut corporation tax by and extra percentage 24% and by 2014 it will be 22% putting the UK within sight of a 20% business tax rate, helping us move closer to our goal of creating a tax system more competitive for business than that of any other major economy of the world”.

Surely, this is the way to attract the right companies and people into the UK who will pay UK tax rather than the increases in tax that we are seeing across the Channel in France. 

Written by Tim Corfield