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A financial spring clean for a stronger summer
A thorough spring clean shouldn’t just be a domestic tradition…it should be a sound financial activity too.
Insolvency expert Danielle Shore, from Leonard Curtis Sheffield, says that a detailed spring examination of business finances might be all it needs to be ready for a stronger summer.
And one area she says needs particularly close attention is outstanding HMRC debt.
“Businesses too often allow large HMRC debts to accumulate, especially in the wake of the pandemic, but it is important to know that HMRC are now coming after those debts and taking firm action,” Danielle said.
“In 2021, as businesses emerged from periods of lockdown, HMRC issued only eight winding up petitions against companies.
“But this last year up to March, they advertised 619 winding up petitions, a figure that demonstrates very clearly just how seriously they are taking this debt now - and everybody should be aware that the number will inevitably rise in the months ahead.
“If you’ve been looking at your finances and simply hope this particular issue will continue to go unnoticed, it is important to understand that it is only a matter of time before enforcement measures are taken.”
Danielle explained that there were measures that could be taken, including requesting a Time to Pay agreement, thereby avoiding companies being thrown into formal insolvency proceedings.
“HMRC are much more open to longer payment arrangements now than they were pre-Covid and they do want to work with businesses to enable them to survive.
“But to do this, it is important to do that spring clean, take stock of your debts and your debtors, explore what are good debts and which are bad debts and make sure everything is in order.”
She added that the Leonard Curtis has a specialist Time to Pay insolvency avoidance team, working closely with companies and HMRC .
“By taking the right action at the right moment, even the most troubled company should be able to look forward to better trading as summer approaches,” she said.
“Now, though, is the time to be realistic about long-term aims and prospects and then take appropriate action.
“The good news is that there are things that can be done to turn a business around, keep things afloat and prepare for the better times to come.
“Simply doing more of the same leads to more of the same problems, so change the way you address those problems and seek professional advice on how to contain a bad situation.
“By putting in place a strong turnaround plan and tackling existing problems a company will be ready to grow and not still be struggling with historic debt when the competition is trading healthily again.”
To find out more about the full range of services provided by the Sheffield office of Leonard Curtis call 0114 285 9500.
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