Updated: 21st December 2021
The large recruitment company had a £22 million turnover and engaged over 1,000 staff.
The company accumulated a substantial HMRC liability due to the misapplication of VAT.
Following an attempt to negotiate payments with HMRC, the company failed to arrive at an agreement. This led to HMRC issuing a winding up petition to force the business into compulsory liquidation as the business was unable to settle its debts.
We were appointed to advise on how to respond to the winding-up petition and stabilise the business for both the short-term and long-term.
To avoid compulsory liquidation, the business was required to act fast within a short window. We proposed entering a formal payment plan in the form of a CVA to tackle HMRC arrears and continue trading without creditor pressure.
We assisted the directors of the company in preparing cash flow projections to support the CVA proposal. For the CVA to be accepted, we analysed income and expenditure to propose a payment arrangement that was sustainable. We liaised with HMRC on behalf of the debtor and the CVA was accepted.
The CVA enabled the recruitment company to pay HMRC in affordable instalments and reduce the pressure on company cash flow.
The company was rescued from the winding up petition and pending liquidation. Over 1,000 jobs were safeguarded, and we developed a robust plan for the company to adhere to in order to ensure its long-term survival and viability.