Insolvency fees rise but the number of insolvencies drop

Hart Shaw Business Recovery is reminding SMEs that revised fees for bankruptcies and company insolvencies will come into force on 16 November 2015.

Fees and charges are reviewed annually and the revised fee structure ensures that the cost of insolvency processes is paid for by those who use them.

The company winding up deposit – which needs to be paid to the Department of Enterprise, Trade and Investment – is set to rise by eight per cent to £1,350, whilst the company winding up administration fee will climb by five per cent to £2,520.

Christopher Brown, Business Recovery & Insolvency Partner, at Hart Shaw, a founder member firm of the UK200 Group said: “These changes will be subject to Parliamentary scrutiny, but the rise in fees is disappointing for SMEs. However, it is promising to learn that according to the latest figures from the Insolvency Service, there has been a fall in the number of company insolvencies in England and Wales over the last quarter.

“Some 3,539 companies entered insolvency in Q3 2015; a drop of more than ten per cent compared to Q3 2014. The decrease in compulsory liquidations mark a drop to the lowest level since 1989. In fact, the estimated liquidation rate in the 12 months ending Q3 2015 was less than half of one per cent of active companies, which is the lowest level since comparable records began in 1984.

“However, if you’re an SME owner that is worried about bankruptcy, insolvency and the associated fees, talk to an expert.”

Hart Shaw Business Recovery has a team of professionals that can assist in this area. To find out more, please contact Christopher Brown on 0114 251 8850 or chris.brown@hartshaw.co.uk.

 

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More UK start-ups survive first year of business than European counterparts

Sheffield based Hart Shaw has commented on a recent study that shows more of Britain’ start-ups are surviving their first year of business than their European peers.

The research conducted by Rosseau Associates highlights that of the 234,000 UK businesses launched in 2011, 93 per cent of start-ups survived their first year of business. This compares to an average survival rate of 83 per cent across Europe.

Britain’s start-up scene has enjoyed considerably more robust health than Europe’s other major economies of France (79 per cent) and Germany (78 per cent), and has experienced the strongest economic growth in Europe as a whole.

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw said: “This is very encouraging news for Britain’s SMEs and shows that we really are leading the way. Despite the tough economic conditions of recent years, the recession appears to have created innovation and entrepreneurs, so Britain’s start-ups are clearly flourishing. Add to that the recent Enterprise Bill and perhaps we will see an even higher survival rate in the coming years.

“Business Secretary Sajid Javid said last month that small businesses are ‘Britain’s engine room’ and at Hart Shaw, we’re proud to be able to assist SMEs and offer a range of services for business owners.”

If you would like advice on how to grow your business and achieve success, please contact Christopher on 0114 251 8850 or chris.brown@hartshaw.co.uk.

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw

 

 

 

 

 

 

 

 

 

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Protect your business from failing customers

Although insolvency statistics for the first six months of 2012 show that the total number of companies being placed into liquidation, administration or entering voluntary arrangements remained static when compared to the same period of 2011, it has been estimated that 8% of UK businesses – some 146,000 businesses and companies – are teetering on the edge, neither failing nor thriving. 

These are businesses which may struggling to pay their debts as and when they fall due, or are having to negotiate payment terms with suppliers or are just able to pay the interest on their debts but not reduce the debt itself.  The danger for these businesses is that without any positive upturn in the economy soon, any change in circumstances – such as a large bad debt, loss of an important customer or a rise in interest rates –  may mean that they are unable to continue trading.

For these businesses, being proactive and taking professional advice before it is too late can often result in the business surviving rather than failing. Of all the companies that I have advised and acted for in the last twelve months, in 70% of the cases I was able to help save the business. Of the 30% which could not be saved, there was often a reason why, such as retirement, disputes between directors or there no longer being a viable business.

So many businesses teetering on the edge is of course a potential risk to those companies and businesses that trade with them and give them credit. If you are trading with one of these businesses you are unlikely to know until it is too late. So what practical things can you do to limit this risk?

Know Your Customer

• Look at their accounts, carry out a credit check and understand what they do. Set a credit limit that you are comfortable with and stick to it – as ultimately that is what you will lose if their business fails and they don’t pay you.

Retention of Title

• If you supply goods rather than services, consider incorporating a Retention of Title Clause into your terms and conditions so that you can recover your goods if payment is not made.

Personal Guarantees

• Consider incorporating a personal guarantee into your credit application form and ensure it is signed by a director if you are trading with a limited company. This is something that more companies are doing. If you have a personal guarantee, be proactive. Use the threat of it to get paid by the company before it fails rather than waiting until after liquidation when the director may not have the funds to pay.

Be Persistent

• Devise a credit control system that works for your business and be consistent in operating it. Keep pressure on your debtors for payment within your terms of business. In the run up to a company or business failing, payment is often made to those who “shout the loudest”. So make you that you are the one who is doing the “shouting”!

For confidential and expert advice please contact Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw on T: 0114 251 8850 or email: chris.brown@hartshaw.co.uk.

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