As the UK begins to reopen – with a full ‘unlocking’ expected in summer 2021 – the positivity for many businesses is being counterbalanced by cash flow pressures; many of which have been postponed over the last 12 months.
Bounce Back Loans, CBILS loans, VAT payment deferral, landlord payment deferral, and PAYE arrears are just some of the common concerns facing directors at present – not to mention the end of the furlough scheme looming in the near future.
As the scheme is wound down and the realisation sets in that repayments are due for Bounce Back Loans and CBILS – amongst other deferred payments – regrettably, we expect more businesses will struggle without being able to lean on the crutch of government support.
For many directors, the overarching concern is the Bounce Back Loan as repayments have now begun and trade hasn’t necessarily picked up. Steering the company back to a solvent position may not be possible and many are fearing liability issues if the Bounce Back Loan cannot be repaid or payments are missed.
This is where Redundancy Claims UK can offer incredible expertise to you and your clients.
Through our extensive understanding of employment law and 40 years’ experience working in director redundancy, we have been at the forefront of a novel solution developed in tandem with several large accountancy practices and one of the UK’s largest insolvency firms.
Subsequently, we are currently advising accountants whose clients comprise company directors and IR35 contractors who have taken out a Bounce Back Loan and are now struggling to repay it, because their company hasn’t recovered. There is legal precedent that directors in this situation can potentially walk away from some or all of that Bounce Back Loan when their company goes into liquidation. Essentially, employment law and directors’ entitlement to national minimum wage (NMW) opens up the possibilities for some, or even all, of their existing Bounce Back Loan to be written off.
If your client is in a situation where they can’t afford to repay their Bounce Back Loan, we can provide free, expert advice that could ultimately reduce or eradicate their Bounce Back Loan exposure.
In some cases, misuse of Bounce Back Loan funds has also created an overdrawn directors’ loan account (ODLA) and again, we can advise on this situation and suggest how your clients can reduce their ODLA liability. In many recent cases, we have been able to reduce or even completely balance out a company director’s overdrawn director’s loan position following Bounce Back Loan misuse.
With IR35 businesses in particular, time is of the essence to take advice as they only have six months from their employment termination date to utilise this solution using a redundancy award as the application process is time-barred. In addition, many directors are now due to start repaying bounce back loans and need to find a solution to deal with these as quickly as possible. I believe through ourselves and our insolvency partner we have that solution.
I trust this is of interest to you and your clients and I would like to discuss this with you in more detail and explain who we are working with and how this solution has been developed.
Does accepting a new job offer before the date of redundancy prevent a director making a claim for redundancy to the RPS
If you are looking to close your limited company, you may have attempted to strike it off by submitting a DS01 form to Companies House. This process is also sometimes referred to as dissolving or company dissolution.
A Creditors’ Voluntary Liquidation (CVL) is an official procedure whereby a company’s assets are liquidated in order to pay creditors. It’s typically initiated by directors when their company becomes insolvent and there is no hope of business recovery.
Redundancy claims are a very professional company, Caroline who is dealing with our case is friendly, compassionate and very clear in explaining everything during this difficult time. The service we have received has been amazing, Thank you.Tina Hill Director of a professional services firm