Insolvency industry trade body R3 (Rescue, Recovery, Renewal) has called on the government to do more to help struggling directors seek qualified help earlier.
Seeking help earlier can expand the number of options that are open to a business in financial distress. Often, however, business leaders are simply not aware of what sources of advice are open to them.
Ahead of the Chancellor’s Autumn Budget, expected on 27 October, R3 has published an open letter calling for more support for business rescue in the aftermath of the Covid-19 pandemic.
This is even more important at this time because many of the measures designed to protect businesses from insolvency came to an end in September.
R3 wants the government to use its own channels to tell struggling business owners to seek advice from restricting and insolvency professionals.
The trade body also encouraged the government to maintain and strengthen HMRC’s approach to supporting viable restricting proposals.
In the early days of the lockdown, R3 called on the tax authority to support all restricting proposals where a business was viable before the pandemic. As a preferential creditor, they argued, HMRC would carry more weight when it comes to approving or rejecting rescue proposals.
HMRC has signaled a welcome change in approach on this issue, but R3 believes they could go further. In their open letter, R3 called on HMRC to agree or to accept or at least consider proposals where they will not receive the full return on its debt.
R3 represents the insolvency and restructuring profession in the UK. These are essential aspects of the economy, promoting regeneration, protecting jobs, resolving financial distress for individuals and businesses and helping create trust in the system.
A report on business rescue found that in 2019, insolvency and restructuring professionals rescued more than 7,000 business and close to 300,000 jobs. Business rescue work also helped return £1.82bn to creditors.
For company insolvency advice, speak to a member of the team today. Call: 0800 611 8888.