Yorkshire trade insolvency association warns of winding-up legislation changes
A Yorkshire trade association for the UK’s insolvency, restructuring, advisory, and turnaround professionals, is warning the region’s directors to seek advice if their business is distressed.
R3 has warned that following a change in the winding-up petition threshold on the 1st April, companies can now face a winding-up petition for debts of £750, after temporary legislation which had previously set the winding up petition threshold at £10k expired on March 31st.
Eleanor Temple, chair of R3 said: “Now, more than ever, it’s critical company directors seek advice if they’re worried about their businesses or concerned about their ability to pay staff, landlords or suppliers. If they don’t, they could face the financial, operational and emotional effects of contesting winding-up petitions in court over a debt of £750.
“Many creditors appreciate the climate that businesses are operating in, and are willing to have a conversation about how and when they can be paid, but that needs to take place sooner rather than later.
“Company directors need to have the conversation about the financial situation they’re in, what they owe and who they owe it to with an expert so they can develop a plan for settling their debts, before creditors resort to legal action to recoup what they are owed.”
Restrictions preventing commercial landlords from issuing winding-up petitions against limited companies for unpaid rent during the pandemic also expired on March 26th.
Ms Temple, added: “Rent is typically one of a business’ largest expenses – especially in the retail and service sectors, and many directors may have found the amount they owe has increased if the pandemic has affected their ability to trade.”
“It will be a while before the business environment returns to pre-pandemic levels, and companies will already have to face the prospect of increased fuel and energy costs affecting their bottom line and their cashflow levels, which will make balancing the books a lot harder without any kind of specialist help.
“If you’re worried about your business’ financial position, or you’re having problems paying suppliers, taxes or staff – which is a clear sign your business is financially distressed – seek advice from a qualified source, someone who can outline the potential options open to you for resolving the situation your business is in.”
Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →
Enjoy the read? Get Bdaily delivered.
Sign up to receive our popular Yorkshire & The Humber morning email for free.