Leonard Curtis has secured the futureof a recruitment firm owing nearly half a million to the taxman with thenegotiation of a Time to Pay arrangement - giving the firm breathing space topay its debts and continue trading.
Experts from the Leonard Curtis fundingpillar stepped in to reschedule the large debt from a six-month to a 23-monthperiod - ultimately rescuing the business which had been finding its originalrepayment agreement with HMRC impossible to keep.
The recruitment company - whichspecialises in commercial and industrial roles - had enjoyed a good year in2022 turning over more than £4 million, but still ran into financialdifficulties felt by the wider industry.
The pandemic had forced businesses toreduce headcount - resulting in fewer successful candidates being placed - butthe added burden of rising inflation also created cashflow issues, withincreased utility bills and national insurance costs.
The company fell behind with VAT,with October 22 and January 23 quarters going unpaid, and were contacted byHMRC in the following April for £485,000 in outstanding liabilities.
The taxman agreed to a Time to Paydeal over six months, but the company found itself unable to meet theaggressive payments.
The recruitment firm consulted Zodeq- an invoice finance solutions provider in Chester - who referred the case toLeonard Curtis to help secure a better deal that would prevent furtherfinancial problems.
As a result, repayments plummetedfrom £71,000 per month to£17,000 over 23 months.
Zodeq Managing Director Paul Cooneysaid: “We were approached by the agency to refinance a seven figure invoicefinance facility that was being provided by a high street bank and had a numberof funding restrictions on it. This resulted in the agency falling behind withHMRC payments that they were struggling to make on time.
“As part of our due diligence processwe found that they had over-promised significant repayments to HMRC over ashort period of time and it was clear there was a high possibility ofdefaulting on these repayments.
“One of the pre-commencementconditions of our facility was that they engaged with the Leonard Curtisfunding team to review this arrangement and see if it could be rescheduled withHMRC.
“Within two weeks it was and the newarrangement is a fantastic result, allowing this excellent agency to get backon its feet and continue their fast-paced growth plans with our assistance.”
Gary Cain, Head of Funding at LeonardCurtis, stated: “This was a very satisfying result.
“The outcome looked bleak for thecompany in question, but together we worked out a better deal with HMRC whichensures their survival.
“This is proof that no matter howchallenging things may seem, there is always potential for a solution if youget the right people involved.”
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