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VAT & PAYE Arrears?

It appears more and more businesses are falling into arrears with PAYE and VAT. Although the majority of customers we help appear to be busy in terms of a full order book and reasonable sales the biggest problem is with cash flow.

Their customers are telling them they can’t pay because their customers can’t pay and so on and so forth. The lucky businesses might be able to go to their bank and obtain an increase in overdraft facility, however we are seeing more and more cases where the bank has promised an increase in overdraft and failed to deliver. Factoring or invoice discounting may release much needed working capital and it is even possible to refinance existing equipment to release equity to provide cash injection.

So what happens if there are no further means to release cash? If there is a significant amount of PAYE and VAT arrears it might be possible to obtain an arrangement with the Inland Revenue and Customs. It can be argued that a corporate recovery specialist will do a better job and can act as an intermediary between your business and the relevant authorities. In extreme cases a creditor’s voluntary arrangement or an administration might be more beneficial to the business going forward.

XL Business Finance has a great deal of expertise in providing funding in the event of an administration. The most important aspect is to appoint a friendly factoring or invoice discounting company before the administration. Even if this means taking out your existing factoring or invoice discounting company. The new factoring company will then appoint a friendly administrator to ensure the directors of the business are in the best possible position to buy the business off the administrator.

These deals are known as pre packs and are growing in popularity. In the current economic climate there are obvious advantages and businesses are using the recession as an excuse to clear out the rot and give the business a new lease of life.

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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.

 

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