Facts
Background
The sister company had traded successfully for over 10 years
but had been hit by a £130,000 loss on a rogue contract. Also the company
had spent over £100,000 on developing a new product and the first sales orders
were beginning to come through. A serious attempt to refinance had fallen
£150,000 short of the £400,000 target and HMRC had refused to agree to time to
pay over 12 months leaving the sister company with no choice but liquidation.
The problem
HMRC had requested a security deposit from the successor
company that was owned and run by the son of the directors of the sister
company and the company could not comply within the 21 days.
The solution
One way to get the security request withdrawn is to agree a
time to pay agreement (“TTP”) with the Crown and the company’s cash flow
forecast showed it could pay the arrears over 3 months. We helped the
directors draft an appeal to the security request and the TTP request supported
by a forecast and an initial payment of 25% of the arrears. The TTP was
granted and the security deposit request withdrawn.
Difference
The new company had a bright future but HMRC were not
surprisingly sceptical that it would pay the arrears and future tax. We
knew that very few 3 month TTPs are rejected by HMRC and helped the director
put a credible case forward. We didn’t have any formal engagement with
the new company or its director but having helped his parents steer the
sister company into liquidation we didn’t want to see a potentially viable
business fail unnecessarily. This is all part of our commitment to see a
job through to the end.