Case study
Case study: Long term HMRC agreement secured for a West Midlands manufacturing company
Background
A West Midlands based manufacturing company faced significant financial challenges following a large decrease in sales from FY23 to the current year. The decline was due to a high value customer reducing orders which was unforeseen. Unfortunately, relying on a small number of key customers in a turbulent market increased the business risk and exposed the company to immediate cashflow issues.
Despite the reduced production, costs for wages, rent and equipment maintenance remained the same while increasing material prices and supply chain issues further squeezed margins. With strong competition limiting the ability to increase prices, and a focus on resolving operational challenges, the business faced significant short-term challenges.
Challenge
With cash flow being strained, the funding team completed a review with the company with the conclusion being a Time to Pay (TTP) arrangement to manage short-term liquidity pressures would be the best solution.
Solution
Through an internal referral from the Leonard Curtis Birmingham office to the business advisory team, Business Advisory Analyst Shamana Rani led the engagement. After conducting a detailed review of the company’s financial position, the team engaged directly with HMRC to negotiate a sustainable repayment plan. A 62-month TTP arrangement was successfully secured covering the total liability with manageable monthly instalments of £4,500.
Outcome
The 62-month TTP agreement was completed with speed in less than a month from point of engagement to agreement. The breathing space provided by this TTP saved 81 jobs and enabled the company to stabilise cash flow and continue trading.
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