Case Study 1

A company that hired out and serviced licensed Hackney Cabs had suffered a severe downturn in trade and although their position was improving, they were struggling to pay off existing HMRC debt. Rather than looking to negotiate repayment, they had stuck their heads in the sand and, at the point they contacted us, were under threat of a winding up order.

We took a close look at their position and, on further investigation, discovered that they had also had 7 cabs repossessed by a finance company. These cabs were then replaced by hire vehicles from a dealer on the basis of a promise to buy them but they had been unable to get finance and once again were threatened with repossession.

Clearly the business could not survive either the actions of HMRC or the loss of income earning vehicles, so we took stock of the situation and put together a refinancing package for the whole fleet which enabled a large deposit to be paid against the cabs they wished to acquire. This made the transaction attractive to the lender and paying off half the HMRC debt put us in a strong position to negotiate on their behalf to enter a Time to Pay arrangement. The business was then able to trade out of its difficulties and the directors were once again able to sleep at night.

Case Study 2

A Midlands vehicle recovery business had already breached a Time to Pay arrangement for £400,000 in VAT and PAYE debt. A further proposal was put together by a leading firm of accountants. However, despite their intervention, the proposal had been rejected not only on the basis of the company’s past performance but also the forecasts that had been presented to HMRC. By the time we were contacted, the company was in a very difficult situation.

Our solution involved a formal insolvency process, whereby a new company was formed to apply for operator’s licences for their vehicles. Once these had been secured, the business was put into administration, leaving the legacy debt with the old company. The new company then put in a bid to purchase the assets of the old company, based on the funding we had arranged on those same assets and we also provided an invoice finance facility moving forward to assist their cash flow. This was a 40 year old business and notably 100 local jobs were saved by using the legal framework that exists for such a purpose.