Hart Shaw appointed Joint Administrator to Chesterfield based Timberline Limited

Administrators have been appointed to Timberline Limited on 2^ndNovember 2011.

Hart Shaw appointed administrator to Timberline Ltd

The Chesterfield based company which operates nationwide, manufactures children’s outdoor play equipment and timber buildings & shelters from two large factories on the Foxwood Industrial Park.

The company which has been trading for over 20 years enjoyed the benefits of a significant growth programme over recent years and was achieving annual turnover in the region of £9m. However a sharp down turn in business from the education market, as a result of public sector spending cuts has lead to the company incurring losses.

Christopher Brown of Hart Shaw LLP, who was appointed one of the Joint Administrators, said “The directors reacted quickly to the changing circumstances of the company and sought expert professional advice. The Administrators are continuing to trade the business whist it is marketed for sale as a going concern.”

The Administrators can be contacted at Hart Shaw LLP, Europa Link, Sheffield Business Park, Sheffield, S9 1XU – Tel. 0114 251 8850.

Hart Shaw Business Recovery & Insolvency

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Managing your business in difficult times

In recent weeks there has been a lot of discussion in the media about the increasingly bleak prospects for the economy, the lack of growth and fears that the Governments austerity plans are not working. The Eurozone crisis continues, indirectly affecting the UK through the banking system and general lack of confidence. One consequence of this has been the Bank of England’s recent announcement of a second phase of quantitative easing, with £75bn to be created and released into the economy over the next three months.

The latest insolvency statistics just released show that during the third quarter of 2011 there was an increase in corporate insolvencies of 9% compared with the same three months of 2010. During this period 3,600 companies became insolvent with construction, retail, hospitality & leisure and property being the sectors that suffered the most.

With spending cuts beginning to take effect and consumer confidence falling as families seek to tighten their already firm belts, there is the real prospect that the economy faces a tougher time ahead than it did three years ago when the credit crunch started.

So what can businesses do to manage themselves through these difficult times?

To survive periods of economic stress, good management is essential and managers must plan for the future and keep on top of how their business is performing. They should ensure that they have up to date financial and management information and ideally should produce monthly management accounts and produce & review cash flow forecasts on an ongoing basis.

As the saying goes, “cash is king”. Businesses should ensure that they invoice promptly and regularly and should not be afraid to chase customers for payment once agreed terms have been exceeded.

Know your customer, establish credit limits and adhere to them. There can often be a conflict between the interests of the sales team and the interests of the credit control team when dealing with customers. However, it should be remembered that there is little profit to be made from a customer who doesn’t pay.

Review your supply chain to ensure that you are getting the best prices and payment terms available and review your own terms and conditions to ensure that you secure yourself in case your customers fail to pay you. For example, what is the quality of your retention of title clause?

Finally take professional advice where appropriate and be proactive in managing your business.

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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HMRC extends use of debt collectors

HM Revenue and Customs has appointed 10 debt collection agencies (DCAs) to recover £1 billion in debts.

It was announced in the June 2010 Emergency Budget that, following a successful pilot, HMRC would use private debt collection agencies operating under industry and HMRC standards to boost HMRC’s debt collection capacity and help the pursuit of lower value debts.

In 2010/11 HMRC said that DCAs would attempt to collect an extra £140 million in tax, with the proviso that it would only refer a case to an agency after writing to the debtor to provide a last chance to pay.

Before the case is transferred to a DCA the taxpayer is recommended to take this opportunity to agree repayment terms with HMRC, as these terms may be more beneficial that could otherwise be negotiated with a DCA.

The pilot scheme employed four debt collection agencies and, together with a far tougher stance on liquidating companies and bankrupting individuals for non-payment of tax debts, proved to be such a success that HMRC decided to extend the number of debt collectors.

More than 40 debt collection companies tendered for the business, worth up to £70 million in fees. The successful 10 agencies will enter a two-year arrangement with HMRC.

It is understood that the DCAs will still be collecting relatively small and older outstanding liabilities, in line with the pilot scheme.

There have been concerns in some quarters, however, that the use of DCAs could lead to businesses going into liquidation, as the enforced collection of old and unbudgeted-for debts might be the straw that breaks the camel’s back.

Some experts are also worried that some vulnerable people could be harassed over relatively small amounts.

For further information about DCA’s please contact Emma Legdon, Business Recovery & Insolvency Manager, on T: 0114 251 8850.

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HMRC refuses Time to Pay

HMRC is refusing Time to Pay (TTP) applications where dividends are used as a form of remuneration.

TTP, introduced in November 2008, normally allows companies and individuals to defer and pay by instalment any taxes that they owe, in a bid to assist with temporary cash flow problems. 

Until recently, more than nine out of 10 applications for TTP arrangements have been granted and most first time applications for instalment payments are accepted. However, HMRC figures show that 3,390 requests for TTP were refused during the initial three months of this year, compared to only 2,360 last year and 2,440 in 2009.

HMRC’s new position is that where a company asks for a TTP arrangement and recently paid out a dividend while running up a tax debt, HMRC will refuse a TTP on the grounds that the company has preferred to use the money elsewhere and therefore the shareholders should support the company.

Many companies pay dividends as part of a tax efficient remuneration package. However, it seems that HMRC take the view that if a company has cash available to make a non-contractual payment to its shareholders, then it can pay at least part of its tax debts.

This policy will almost certainly hit small and medium-sized businesses hardest, potentially leading to cash flow problems and may force more businesses into increased hardship, with some being forced to enter into a formal Company Voluntary Arrangement (CVA), administration, pre-pack administration or even liquidation.

For further information about TTP please contact Adrian Dunkley, Tax Manager on T: 0114 251 8850.

Late payments still a problem for small firms

New research has revealed that unpaid bills still present a major problem for many smaller businesses.

The study by Bacs, which runs the direct debit system, shows that more than half (53 per cent) of SME’s in the UK suffered delays in payment. This was an increase of eight per cent on last year’s figure.

SME’s are owed a total of around £24 billion in unpaid bills, with the average amount of outstanding payments per firm now standing at £27,000.

The research suggests that large companies are mainly to blame, with almost a third of bigger firms failing to send off payments on time.

The problem has also been aggravated by smaller firms having to spend up to half a day a week chasing outstanding invoices. This equates to 158 million hours a year in work time altogether.

Hart Shaw’s Business Recovery & Insolvency department specialise in debt collection so if this is a concern for you and you would like talk to us please contact Emma Legdon on T: 0114 251 8850 or email: emma.legdon@hartshaw.co.uk.

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Website re-brand for Hart Shaw Business Recovery & Insolvency

Hart Shaw Business Recovery & Insolvency have re-branded their website in the next stage of the firms image change.

Earlier on in 2010 Hart Shaw re-branded all their corporate literature, followed by their main website but has since re-branded the Business Recovery & Insolvency specific website to keep in line with this new image.

The initial re-brand was done to coincide with the firm celebrating over 100 years of service in South Yorkshire.

Brendan Hall, Marketing Co-ordinator at Hart Shaw said: “We have been implementing various new techniques with the Business Recovery & Insolvency website recently and also wanted to make it more user friendly so it is easier for our clients to find the information they need.

“We are really pleased with the way it looks and works as it mirrors our already well established main website. A lot of credit goes to our web developers Total Solution who have successfully guided us through the changes.”

The re-branded website can be viewed at: www.hartshaw-bri.co.uk.