Case studies
Case study: Enabling financial stability for a holding company facing cash flow pressures
Background:
A North East based holding company faced significant financial strain requiring HMRC arrangements for two subsidiaries. In recent periods, the company encountered substantial software issues rendering the financial management information (MI) generated by the system unreliable.
In addition, significant projects reached completion concurrently, resulting in a substantial proportion of revenue being temporarily tied up in outstanding balances. This timing mismatch between expenditure and income placed additional pressure on cash flow, reducing the liquidity available to fund ongoing operations and meet short-term financial commitments.
Challenge:
The company had originally planned to secure finance to address arrears and maintain a healthy cash flow to support ongoing operations, however, persistent software problems resulted in inaccurate financial reporting, which failed to present a true and fair view of their financial position. As a result, the subsidiaries were unable to supply the requisite financial information to prospective finance providers, thereby hindering the progress of funding applications and placing further strain on cash flow.
Solution:
Referred by their accountant, the company engaged Sarah Gray and Iain Nairn from Leonard Curtis. Understanding the urgency and complexity of the case, Sarah and Iain worked with the Leonard Curtis Business Advisory team to find a solution.
Business Advisory Analyst, Ben Powell, led the engagement. Ben collaborated with the company director to develop a tailored plan. Working directly with HMRC, two Time to Pay (TTP) arrangements were secured with one totalling £10,000 over a 38-month term and the other at £4,000 over 42 months.
Outcome:
These arrangements not only provided financial stability but also saved 49 jobs across both subsidiaries. The team were able to exceed expectations as the company anticipated a much higher monthly agreement than the arrangements secured, allowing operations to continue.
Feedback from the accountant:
“Our client was extremely pleased with the service provided from Leonard Curtis in organising their time to pay arrangement with HMRC for corporation tax. The quick actions of Leonard Curtis gave our client a massive sense of relief with their cashflow, knowing they had an attainable payment plan in place.”
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