The hidden cost of going under without insolvency- corporate insolvencies

Creditors could be losing billions of pounds each year to “hidden” business closures, where companies shut their doors without going through formal insolvency procedures.

The number of businesses simply being struck off the Companies House register has risen by almost 30pc over the past three years, to 179,000 in the year to April.

Formal corporate insolvencies have been in decline since 2008. The strike-off numbers may explain the lower-than-expected official company failure figures since the downturn, according to R3, the insolvency trade body that conducted the study.

Source: www.thetimes.co.uk

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Business groups call on government to scrap legal reforms that will cost businesses and taxpayers £160m per year

There have been warnings from Business groups, including accounting and insolvency bodies, the institute of Credit Management, and the British Property Federation, that government legal reforms could cost creditors over £160 million per year from next April – with rouge directors being the big beneficiaries.

Six influential business groups have signed and sent a letter to the Prime Minister, David Cameron and Justice Secretary, Chris Grayling, outlining their concerns and calling for the government to scrap the planned change.

The letter highlights the planned changes and describes them as being “anti-business, will increase tax avoidance and evasion, and will benefit directors of insolvent companies who have committed fraud or behaved recklessly.”

From April 2015, insolvency litigation will no longer be exempt from the crackdown on ‘no-win, no-fee’ legal funding introduced by 2012 reforms. This type of funding is often the only way creditors can afford to pay for court cases to retrieve money from rouge directors that have wrongly taken money out of a failed business.

Under the current system, successful claims see both creditors’ debts returned and the rouge director charged for the cost of the court case.

Source: www.r3.org.uk

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The Money Statistics - October 2014

The latest money management statistics have now been published by The Money Charity, which was known as Credit Action until October 2013, and is the UK’s financial capability charity.

These figures have been produced since 2005 and were previously called the debt statistics, but have now been renamed to encompass a wider range of how we spend money in the UK.

The key figures for October 2014 can be seen below.
• £55,008: average household debt (including mortgages) in August, up from £54,981 in July
• 6.7%: percentage of household pre-tax income saved
• £521: average annual increase household debt per UK adult
• 6,405: new debt problems dealt with by Citizens Advice Bureau every working day
• £115,940: average mortgage size for households with mortgages
• 1,000: number of people who became redundant every day between May and July
• 4 Minutes and 51 Seconds: time between each bankruptcy and/or insolvency
• £162.6bn: outstanding consumer credit debt at the end of August 2014
• £4,347 per second: government borrowing in July 2014
• £29,013: average first-time buyer deposit

If you know any businesses or individuals that are struggling with debt, recommend they visit our website to see how we have helped similar people. We are happy to provide a free initial consultation without obligation.

There is Life after Debt!

Source: The Money Charity

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Tax Incentives Point the Way

Up to 15 major corporations are looking to relocate back to the UK following changes in tax rules.

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

UK’S AAA RATING CONFIRMED

Standard and Poor have recently confirmed the UK’s AAA credit rating but have also warned that the Government’s austerity drive would continue to drag on growth for years to come.

S&P said the outlook for the UK’s AAA rating was “stable”.

George Osborne said S&P’s decision was a reminder that without austerity the UK would be lead into “an economic catastrophe”.

S&P acknowledged that household spending would be hit by weak wage growth, rising unemployment and a weak housing market.

Tim Corfield - May 2012