Inland Revenue (HMRC) was responsible for 58 per cent of all the petitions submitted over the last year to wind-up companies compared to just 43 per cent in the previous year. Petitioning to wind-up a company is the “nuclear” option used by creditors who hope to get paid back some of the money they are owed by having a businesses’ assets liquidated and sold off.
These figures come after those published last week by the British Bankers’ Association, which revealed that traditional bank lending to small businesses in May 2010 fell by more than £100m compared with the same period in 2009.
However, Scotland saw a modest rise in payment times beyond agreed terms, from 23.38 days in the second quarter of 2009 to 23.65 days for the same period this year, while late payments in the North West averaged 25.16 days to overtake London as the slowest paying region.
Balancing the books is a good thing for every business, and the Government is no different in this regard, but let us hope that the Chancellor has recognised the ripple effect that will ensue from public expenditure cutbacks, and the savings more than offset the costs to the country of business failures and consequent job losses’ impact upon the Benefits budget.
Treasury Exchequer Secretary David Gauke said a complex tax system created “uncertainty and instability”, sending the wrong signal to businesses wanting to invest in Britain.
HM Revenue & Customs (HMRC) has issued a reminder to businesses affected by new online filing requirements for VAT returns.
Phil Cotter, managing director for credit services at Experian, UK & Ireland, said: “Predicting risk in consumer lending has become more complex, with accounts once correctly considered medium to low risk and profitable increasingly entering collections due to the changing economic climate.”
Huge backdated energy bills are hitting small businesses at a time when cash flow is increasingly tight.
Firms cannot rely on the same legal protection as individuals when it comes to fighting retrospective bills. If electricity suppliers get their meter readings wrong, individuals can be charged only up to 12 months retrospectively whereas bills for small businesses can be backdated for up to six years.
Even though energy regulator Ofgem brought in new rules on fair billing for small businesses earlier this year, it failed to protect those that have been under-billed and are hit with large payments.
