20+ Years Experience
Specialist Debt Help
We are Cannot Pay, a company offering company debt help in Edinburgh, who have assisted thousands of companies throughout the UK.
With specialists based in Edinburgh we can offer fast support and in May 2024 are able to get help to you very quickly.
Are you are struggling to make payments to creditors from your business in May 2024?
During the current pandemic, this is very common in the UK with business debts rising.
It can be a stressful time and you need to understand there are many solutions to help you during these hard times.
In this guide, you will understand there is light at the end of the tunnel with some debt options to make the process manageable for your company in Edinburgh Edinburgh.
Britainâs economy is facing a lengthy recovery from the third coronavirus lockdown.
Business debt levels have risen in the UK massively after almost a year of economic turmoil caused by the pandemic.
British businesses took on debt at more than twice the normal average growth rate since the crisis began and are on course to have borrowed ÂŁ61bn in total by the end of 2021.
If you are wondering what to do if you cannot afford to run the payroll this month you should always try to make it a priority to ensure your staff are paid.
Not being able to pay your staff their wages on payday could spell disaster for your business in Edinburgh. Without a workforce, you could see operations rapidly grinding to a halt, preventing you from taking on any new work and struggling to fulfil current orders.
For the ongoing viability of your business, having staff you can rely upon to carry out the work required is vital. In order for you to be able to rely on them, they, in turn, must be able to rely on you to be a good employer, which includes fulfilling your duty of paying their wages in full and on time.
If struggling to pay employee wages, there are some options for lending from bounceback loans, bridging loans or invoice factoring measures.
When your business is insolvent, you have a duty as a director to place the interest of its creditors above those of the company itself and to ensure you do not do anything that could worsen your creditors’ position. When you have failed to pay your employees, they become a creditor of the company and their welfare must be adequately safeguarded.
If you cannot pay your staff wages, you need to speak to an insolvency practitioner in Edinburgh Edinburgh. Get in touch today and the IP will run through all possible solutions you have available (all calls are no obligation and completely confidential).
You can consider Time to Pay arrangement with HMRC (TTP) if you are unable to pay VAT.
HMRC may allow you to make outstanding VAT repayments through monthly instalments across a maximum of 12 months.
You will need to negotiate new payment terms with HMRC or run the risk of winding up your company if there is no viable repayment plan agreed with HMRC.
Yes, you can go to jail for not paying VAT with a possible prison sentence of up to 7 years.
It is a serious offence to intentionally evade paying VAT payments.
VAT evasion is a criminal offence under section 72(1) of the Value Added Tax Act 1994.
Charges can also be brought under the Fraud Act 2006 for not paying VAT.
If you are struggling to pay your self-assessment tax you need to speak to HMRC to arrange a time to pay the agreement.
You’ll be charged penalties if you do not arrange a time to pay arrangement.
The penalties will be charged if you are one month late, then again at 6 months late and again if 12 months late.
HMRC charges 5% interest of the original amount you owe HMRC on penalties.
If you have received a County Court Judgement you should act quickly to pay.
Regardless of whether you think you shouldn’t pay you should act quickly on these debts.
If you canât pay the CCJ the parties you owe money to can pursue further action to recover what theyâre owed, such as sending in bailiffs or issuing a winding-up petition.
Creditors can send debt collectors, bailiffs, or High Court Enforcement Officers (HCEOs) for unpaid County Court Judgements.
Enquire today and see what a regulated insolvency practitioner might be able to do in stopping the bailiffs and debt collectors knocking on the door.
If your company is unable to pay back this emergency bounce-back loan, it is not too much of a problem, if you have acted âreasonably and responsibly as a company directorâ.
Who knew what length of time the Covid crisis would last? If circumstances changed and you act properly there is nothing much to worry about. However, it is likely that if you do not pay back the bounceback loan then your credit rating may be affected at the bank.
What does not acting âreasonably and responsiblyâ mean? Well, if you used the bounce-back loan to repay yourself any loans that you introduced, or pay dividends or drawings when the company cannot pay normal suppliers or creditors, then this is called a preference and is actually against the law set out in the Insolvency Act 1986.
If businesses are unable to pay back their bounce-back loan, then the declarations made at the application stage will be reviewed by any insolvency practitioner and your actions carefully considered.
Upon applying, business owners were asked to formally declare that COVID-19 was the cause of the negative impact their business was facing and, that prior to 2020, the company, was âfinancially soundâ. If this information is found to be false, then again, the director may be made personally liable for the loan, post-liquidation.
If you know your business cannot pay rent, it is best to approach your landlord about business premises arrears, informing them of your current situation and try to reach an amicable agreement, potentially including a temporary suspension or reduction in rent.
Any agreement should be properly documented.
If your company cannot pay its debts as and when they are due, it is insolvent. This means directors must look at and assess the options available to them.
Business credit cards are designed to help you finance entrepreneurship, though they do not shift responsibility from you to your company. In fact, most issuers embed a personal guarantee into the agreement that permits it to hold you liable for repayment of any debt you accrue with the card, even if all the charges were for your business.
If personal guarantees are applied to your business credit card agreement this will mean if you wind up your company then any debts on this business credit card would be transfered to your personal debts and could make you go into a personal IVA or debt management plan.
If you find yourself overwhelmed with business credit card debt try getting assistance from a professional. IP’s are here to help stressed-out borrowers. An IP can create a payment plan to help you stay on your feet while also paying your bills.
Business rates are essentially a tax imposed on properties which are used for commercial as opposed to residential purposes.
Business rates are enforced on a variety of units including retail units, warehouses, offices, bars and restaurants.
There are a number of business rate relief schemes which could help cut the amount you have to pay should you qualify for them.
Business rates are administered by local councils, and they have the power to implement a variety of measures on companies which fail to pay on time. This typically follows the following process:
If you are having problems paying your business rates, your first port of call should be getting in contact with your council. If you notify them of your inability to pay before you miss a payment, you stand a much better chance of being able to negotiate some form of plan with them going forwards.
Itâs important to note that if you can pay your tax bill, you should.
An HMRC Time to Pay arrangement is based on your income and expenditure and HMRC reserves the service for those in financial difficulty. Plus, because of the added interest, itâll end up costing you more to clear the debt in the long run.
If youâve considered this and still think you canât pay your tax bill, you should get in touch with HMRC as soon as possible.
Yes you can get HMRC debts written off through a debt solution such as an IVA.
However, the firm has to agree to this.
As a result, you should be in a position where the solution ultimately grants HMRC more money than they would otherwise have gained through bankruptcy.
If you do not pay your HMRC tax bill on time and cannot make an alternative arrangement to pay we strongly advise you speak to a business debt expert.
HM Revenue and Customs (HMRC) can take enforcement action to recover any tax you owe.
You can usually avoid enforcement action by contacting HMRC as soon as you know you’ve missed a tax payment or cannot pay on time.
Help and advice is available to give a manager director or financial director confidence in hat is the best business decision to deal with your current financial situation.
From vat issues, tax returns owed, hmrc tax arrears, cash flow problems to supplier debts then insolvency practitioners can offer feedback and advice to assist business owners.
The best thing you can do before repaying any creditors or making an arrangement to repay money owed is to seek advice from a business debt advisor.
A business debt advisor can talk you through all the various solutions available to make sure you can consolidate debts into an affordable payment plan.
If you feel the debts have soared out of control the business can no longer carry on trading the business debt advisor can also help wind up the company, liquidate the business or look at solutions to close your company.
But before making any decisions on the business debt solutions below we strongly advise you speak to a financial business expert who can assist with any questions you might have.
A CVL is also known as âinsolvent liquidationâ.
A Creditorsâ Voluntary Liquidation is a procedure which can be instigated by the director(s) of an insolvent company, where the shareholders of the company agree that the business should cease trading.
This is the form of liquidation, which is most commonly used in the UK.
When the directorsâ have resolved that the company should enter into CVL, all trading must cease and company assets will be sold in order to repay its liabilities.
Secured creditors with a fixed charge will generally take priority, followed by creditorsâ with a floating charge, and unsecured creditors.
A CVA is an option for a company which has a viable business but maybe facing financial strain.
A Company Voluntary Arrangement might be the best solution when receiving increased creditor pressure as a result of poor cash flow.
It is a form of composition (similar to an Individual Voluntary Arrangement), which will be overseen by a licensed Insolvency Practitioner (âIPâ).
The purpose of a Company Voluntary Arrangement is to provide the business with âbreathing spaceâ so that it can continue trading.
The company makes an affordable monthly contribution in relation to its existing business debts.
Monthly repayments are usually made for a period of 60 months, but the duration can be shorter if this is acceptable to the companyâs creditors.
A Compulsory Liquidation is a process to wind up an insolvent company through the courts. Compulsory Liquidation is usually referred to as âWinding-Up Order”.
The S123 IA 1986 sets out the definition of Insolvency:- Creditor(s) are owed more than ÂŁ750 and have either served a 21-day demand which has not been met or judgment has been given or it is proved to the satisfaction of the Court that the company cannot pay its debts as they fall due or the companyâs liabilities exceed its assets including contingent liabilities.
Once the company has been wound up, creditors cannot bring action against the company except with the courtsâ permission. Creditors will be invited to send in details of their claims and if there are surplus funds after costs, unsecured creditors will participate equally for a dividend.
If you would like to receive even more information on Cannot Pay services in Edinburgh, make sure you get in touch with us today!
An MVL is also referred to as âsolvent liquidationâ.
The Members Voluntary Liquidation procedure enables shareholders to place a solvent company into liquidation to realise the business’s assets and distribute the surplus proceeds to the companyâs members.
The process is most often used to wind-down a company which has come to the end of its useful life.
A Members Voluntary Liquidation will only be suitable for a company which is solvent.
The statutory definition of âsolventâ is that the company is capable of paying its debts, in full, plus statutory interest, within 12 months of the date of the liquidation.
The administration is an option for a business facing financial strain or creditor pressure.
In many cases, a company which enters Administration can preserve the core business, and maintain continuity with its customers, and staff.
A company in Administration is legally protected from the commencement (or continuation) of any action against it.
This protection provides âbreathing spaceâ and gives the companyâs Board time to put together a plan of action which could include restructuring, assessment of cash-flow and future plans, or even marketing the business for sale.
Typically, a sale is agreed upon before the Administration. This is widely known as pre-pack administration and involves a sale to (all, or a number of) the existing directors operating a newly formed company.
In any case, a sale of the business must be viable and a buyer will need to demonstrate that the newly formed company has a good prospect of success.
Behind most success stories, there may be a previous failure or a very near failure.
We strongly advise you enquire to speak to a business debt experts today for a no-obligation call which will be strictly confidential.
Receiving debt advice is taking the steps to eliminate stress and anxiety on not knowing what solutions you might have.
The UK is a great place to start a business but it is incredibly competitive.
Entrepreneurship will always carry the risk of failure.
If your business is struggling with unmanageable debts, itâs vital you are able to work with a practice who will be honest about what is achievable and then hopefully exceed your expectations with their efforts.
The Insolvency Practitioners Association regulates our formal insolvency solutions.
Get in touch today and speak to a professional debt advisor on your solutions available.
Make sure you contact us today for a number of great debt help services in Scotland.
Here are some towns we cover near Edinburgh.
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Harrison ReidWe have used Cannot Pay for many years as they are certainly the best in the UK. The attention to detail and professional setup is what makes this company our go-to company for all our work. I highly recommend the team for the immense work - we highly recommend them!
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