Welcome to the LCI Limited Company Insolvency Blog

It does not matter if you have a small business or a larger company, any size business can make changes to make their company more eco friendly. You will often find that by making these changes, you could save a lot of money as you do so. Having a company that is striving to be eco friendly is also a great marketing stance. In this article we will discuss 5 great ways you can make your business more eco friendly, reduce your carbon footprint and also save money. 1. Become digital These days, especially since the Covid-19 pandemic, everything is moving online so why not try to do the same with your business. Instead of printing promotional material, try digital marketing. Distribute email and digital magazines rather than printed ones. Set up an intranet for employees to cut the need to print anything to a minimum and send everything digitally from calendars to information. 2. Add commuting options and work from home options for your employees Providing people with opportunities to work from home rather than driving to the office will be more eco friendly and more cost effective. Office bills can be lowered as you wouldn't necessarily even need one if you went fully remote. You could also get a smaller office and rotate staff days with desk sharing options. This can parking costs and employees will also be happier. You could also consider other transport options such as carpooling so less cars need to drive to the office. 3. Use renewable energy if possible If you can, consider using renewable energy for your business such as solar power. This can save money in the long run and will also make your business eco friendly. Even if you rent out your office space, it could be worth having a chat with the landlord to see if they will consider installing solar panels or other renewable energy resources. 4. Make business travel more eco-friendly and cost effective If you or your employees need to travel for your business you can consider options to make this more eco friendly and cost effective. Using sky scanner to find flights in advance can save you money as it compares flight providers for you. It will also tell you the greenest choice for your flight. You could timetable appointments near each other to be done in the same trip to save money and fuel by only needing to make the journey once. You could also consider holding some meetings online rather than in person to cut the need for transport altogether. 5. Reuse and recycle where you can If you are always looking for ways to reuse or recycle things then you are going to be making your business more eco friendly by cutting down on landfill waste and you will also be saving money. Old office supplies can be reused such as folders, binders and drawing pins. Paper could potentially be printed on the back or waste paper, provided it wasn't confidential information, could be used for notes.

The Federation of Small Businesses have called upon Rishi Sunak for more help in dealing with the fact that so many small businesses are currently at risk. The Chairman of the Federation of Small Businesses, Martin McTague has warned that almost half a million businesses are at risk of going bust within the next few weeks if the government doesn't give more support. He warned that, whilst the £15 billion cost of living package is a good thing, unless targeted measures were rolled out to employers, people could soon lose their jobs. There is a huge issue with small businesses in the UK right now. Small businesses are facing around twice the rate of inflation for production and are likely to run out of capital because of this. This would mean that many businesses may end up going bust leading to mass unemployment. The Office for National Statistics recent statistics show that 40% of UK small businesses currently have less than three months of cash and 10% of those businesses are in serious trouble. This equates to 200,000 small businesses in serious trouble with a further 300,000 having only weeks worth of reserves. Rising energy bills, wholesale and production prices, import costs and fuel costs have contributed to many small businesses finding themselves in this position. They are finding themselves unable to trade at profit which is leading to a downward spiral of debt and unprofittability. In April of this year, consumer price inflation was at its highest level since the early 80's and the Bank of England has now estimated that inflation prices will rise even further to around 10% by autumn. Many businesses are being forced to raise their consumer prices to maintain some level of profitability within their business and this has a knock on effect on customers being able to afford their services. For some, it simply isn't possible to continue trading. Martin McTague explained that with no further support, the £45 billion given towards supporting businesses during the Covid-19 pandemic and designed to keep them afloat, will have been wasted. If you own a small business or are a director of a company and you have found yourself facing some of the issues discussed in this article then there are still options available to you. If you feel that your company may no longer be viable and isn't going to survive the current crisis then company liquidation may be an option you are considering. If you would like to talk to someone about this to see if this would be a good option for you and your business then feel free to fill in this form . Someone from LCI Limited Company Insolvency will give you a call as soon as they are free to discuss your circumstances and your options for the future. If limited company insolvency is the route you wish to take then our friendly advisers will be happy to pass you straight over to get the ball rolling for you. In a lot of circumstances, if you are on the payroll for your business, you may also be able to claim a redundancy payment during the insolvency process. If you are worried about paying back your bounce back loan then don't be. These were 100% backed by the government so, provided you used it according to the government guidelines at the time, this will get paid off for you during the insolvency process.

Finance applications for business are becoming more difficult after the covid-19 pandemic and lending to small businesses is becoming less popular across the UK. This means that a lot of small businesses are finding themselves in a position where they need to start looking somewhere else for funding options. One fifth of small business owners don't actually know where to look for funding and aren't aware of options available to them. The lowest percentage of small companies applied for finance at the beginning of 2022 since SBI records started and of those that did apply just over 40 percent had their applications approved. This is also extremely low. Banks are being over cautious at the moment due to the financial strain and uncertainty of the last few years and small businesses are being urged to try and find other sources of finance rather than rely on loans they are unlikely to be approved for in the current financial climate. Having said this, it seems it is harder to find funding options than you would imagine and one in five small business owners don't know where to find funding to help their businesses grow. Here we will discuss five ways to raise funding for your small business or start-up without having to apply for a loan. 1. Crowdfunding Crowd funding allows you to raise money you need for a certain business venture or product by asking the general public online. It is a good option for businesses with growth potential but it can also be a time consuming option for funding. The larger the amount of people you can reach with your crowdfunding idea, the more chance of getting funding but you may need to invest a lot of time and effort into publicising your initiative in order to hit your funding target. 2.Business Angels Business angels are wealthy individuals who can provide your business with funding in exchange for shares in your business and profits. If you are happy to give away a share or percentage of your business then a Business angel could be a good choice. Some investors will not only put money into your business, but they can also have experience or ideas you may benefit from and many can offer you advice and guidance. 3. Research and development grants The Government actually rewards innovative companies and there could be free money for what you do with your business. You would not have to repay a grant if you were eligible for one. You must however be doing the right type of work to qualify for a grant. 4. Venture capitalists Venture capitalists are investors who put in a much larger investment than an angel investor would. You would give them equity in your business in exchange for their investment. In addition to the funding, venture capitalists will offer business expertise to help your business. They are often well networked and can provide contact to other helpful people in the business world. To use a venture capitalist, you would be likely to have to hand over a big percentage of your business. 5. Fiends, family and people you know You may decide to ask your family and friends for support with your business. This option works best for those in the start up phase that need an initial boost to get them to the point where they can apply for other funding options. For friends and family, it could be a good investment provided you offer them something in return such as interest on their loan. However mixing business with relationships can be a problem when things go wrong. How understanding would your family be for instance if you lost their money and had no way to pay it back. This would need to be discussed and considered by both parties before any action was taken.

Every day business owners in the UK throw away money they don't need to. In this article we discuss 5 ways that you can avoid throwing your business' money away so that, in the long run, you have more money to invest back into your business. 1. Make sure you budget When you make a budget for your business, you will work out exactly how much you have to spend and on what. Provided that you stick to your budget and you're not tempted to go over by making that little purchase you don't actually need to make, you will be better off than if you didn't have one. To make the best budget possible be sure to look back at it every six months and make any small changes as necessary. Write down all your business expenditure in detail and look at where you could be cost cutting. Take the time to compare supplier prices so you aren't losing money by using the wrong supplier. If you regularly visit your budget and make sure you do these things then you will not throw away as much money in expenditures you don't need. 2. Borrow only when needed Around 55% of business owners end up borrowing money to help their business at some point. Borrowing without planning could actually harm your business in the long run. Make sure, if you borrow money, that you know everything about the loan including the payment terms, interest rates and late payment fees. Make sure you only take out a loan where you know you will be able to make the payments back and take into account any emergency money you may need. 3. Look at your business data Your business data is extremely useful and if you keep records diligently then you will be able to tell where you are overspending, making wrong pricing choices and doing well. Sit down every six months and look at bank statements, budgets, marketing spends and overall business expenses. Review all the data and ensure your finances are going in the right direction, making changes to your budget etc as needed. 4. Research everything It is too easy to waste money when running a business by jumping into decisions without researching them first. With every decision about spending money you should do your research to find the best and cheapest ways of doing things. 5. Negotiate Learn when it is appropriate to negotiate a better deal. If you have an expense for your business which you feel could be lower, don't be afraid to try negotiating a better deal or price. You can save a lot of money by negotiating, playing companies off against each other and generally knowing how to get the best deals. You can also save money by paying bills annually rather than monthly such as car insurance or subscription costs. Always be looking at lowering the cost of everything you do within your business (without compromising on customer experience) and there will be ways you can do so.

Due to extensive rises in interest rates, businesses' debts have become increasingly difficult to pay and as a result have pushed businesses already in debt further and further into the red. The result of which is businesses becoming inviable and an increase in business insolvencies. During March 2022, there was a 39% increase in UK company insolvencies and a huge 2114 businesses went into insolvency during the month. This increased from 1517 businesses going into insolvency in February 2022. During January, February and March, we have seen the highest number of company insolvencies in any quarter of a year for the last 5 years. There were a total of 5197 company insolvencies during the first three months of 2022. The reasons for these insolvencies are both inflation and interest rates. Businesses have had to deal with huge increases in inflation with gas and electricity costs rising by around 250% compared to previous years and increases to fuel costs as well as base product and import costs also contributing. Rises in interest rates have meant that businesses are having to make increased payments towards their debts, pushing them further into debt. With HMRC now moving to recover arrears from companies that have failed to agree TTP or Time to Pay arrangements and the interest rates and inflation increasing, many companies are being left with very little option but to move towards insolvency. There are a lot of businesses who were just getting by until recent increases in borrowing costs and interest rates, who are now in a bad position financially and being forced to make drastic decisions such as insolvency. Financially, it is probably one of the most difficult times for businesses since the covid-19 pandemic started. Whilst, during the pandemic, there was an abundance of financial support for businesses, there isn't that help available now. More businesses will fail without this support and because of the continual rises in cost of living in the UK. There is also now the added issue of bounce back loan debts needing to be paid back and with grace periods on payments coming to an end, some companies are finding that they can't actually meet the payments for the loans that they took out to keep them afloat during the pandemic. Ironically now, these loans are sometimes the cause of businesses failing and needing to go into insolvency to clear them. The good news that can be taken from this is that the bounce back loans were at least 100% government backed if taken out and used correctly. This means that companies that go into insolvency will have their bounce back loans paid off by the government. It is an increasingly busy time for Insolvency Practitioners at the moment and we are starting to see an influx in business insolvencies. If you are finding that your business is in a position of increased costs causing your business to go into debt and you would like to speak to someone about whether insolvency would be your best option then please fill in this online form f or free, impartial advice from an advisor from LCI Limited Company Insolvency. Someone will call you back as soon as they become available to discuss your circumstances. We can even pass you straight over to the Insolvency Practitioner while you are on the phone if you decide insolvency is your best option.

The Government is currently in discussion about making small business loans from banks a permanent feature. This will work as an extension of the support offered throughout the covid-19 pandemic and provide businesses with money to help them grow in the aftermath of the pandemic and during the current energy crisis. Banks and Government officials have been meeting together over the last few weeks to discuss different ways that small business loans could become an ongoing thing. During the covid-19 pandemic, a staggering £79.3 billion was given in the form of loans to businesses to keep them afloat. The new loans, if they went ahead, would be for a slightly different reason. Instead of aiming at keeping businesses from failing and becoming unviable, the focus would be more on helping businesses to grow. A Government questionnaire has been sent out recently to bank officials asking, amongst other things, what level to set the treasury guarantee, whether personal guarantees would be needed and what companies would be eligible for the loans. There were questions over how backed the loans should be by the government. Recent Bounce Back loans were 100% backed and the Coronavirus Business Interruption Loan Scheme was 80% backed. This means there is a possibility these new loans will also come with some form of government backing, though the amount is yet to be determined. The only people set to be not so pleased about the possibility of banks offering more loan support to small businesses are the non bank lenders who have traditionally profited from banks being reluctant to help. At the end of June this year, the Recovery Loan Scheme currently running in the UK that guarantees 80 percent of a bank loan up to £10m will end. Over three billion pounds have been lent under this scheme during the time it has run. There was also the Bounce Back Loan scheme running during the pandemic aimed at keeping businesses afloat in a time of crisis. This Bounce Back Loan scheme has been heavily criticized for lending money to businesses without enough checks in place, leading to fraud and situations where businesses are unable to pay back their loan. It is currently estimated that up to £4.9 billion could now be unrecoverable from the Bounce Back Loan scheme. The good news for small businesses who took advantage of the Bounce Back Loan scheme but are now in a position where they can't pay back their loan and their company is no longer viable, is that these loans were 100% backed by the government. In many circumstances, this will allow businesses to close and these loans to be covered by the government. This will give company directors the chance to clear their debt and start afresh. If your business is in a position where you will struggle to pay back your Bounce Back Loan and you would like more information about company insolvency then you can fill in this online form to speak to one of LCI Limited Company Insolvency's friendly debt advisors.

Amazon and Enterprise Nation have launched boot camps that are aimed at helping small businesses recover from covid and become more resilient. They will look at how small businesses and entrepreneurs can raise funds, become resilient and survive the economy. The boot camps are completely free and are taking place in March, April and May this year. There is a special session dedicated to women owned businesses and the challenges they face and then following that there are sessions for businesses that want to explore physical retailing and attend pop ups. The events are scheduled to have a good range of experts speaking on many topics including raising capital mindset, live-streaming, Amazon selling, merchandising and data analytics. There are opportunities to attend some of these events online and some in person. Amazon's recent research has found that although 81% of small businesses in the UK have invested in digital skills, 78% have said they would benefit from free training to support their growth. Their researchers found that small businesses are particularly interested in training in resilience. Resilience is an essential tool for long term success in any business. With businesses opening back up after periods of turmoil during the pandemic, people are looking for help and training to keep their businesses from failing. For some businesses that started during the pandemic, digital sales will have been their main focus but they may need extra training and help now to take their products to the physical world and places people are buying. By learning these new skills, small businesses will be empowered to succeed in the future. The current boot camps came about as an extension of the Amazon Small Business Accelerator which is a support package set up by Amazon and Enterprise Nation that has already helped over 400,000 business start-ups since 2020. The Amazon Small Business Accelerator Boot Camps available in 2022 are: 30 March – Women Founder Fire-Side Chat and Networking: Building business resilience There are only a small percentage of businesses in the UK currently run by women founders and this workshop is aimed at changing that. Three women who are currently making waves in their industry will be available for a casual chat where they will take audience questions. 14 April – Becoming a successful online seller This is a three hour online boot camp aimed at teaching people how to sell well online. Information given will include how to set up an Amazon store. Amazon representatives and online experts alongside already successful small business owners will share their secrets to success. 12 May – Help to master physical retail This online boot camp will be three hours dedicated to learning how to master physical retail, sell to buyers and launch pop-up shops. Retail experts, space providers, and founders will be teaching the boot camp which will cover retail space options for small businesses, how and when to test physical retail, how to make the most of a Popup, and getting stocked with large retailers. 26 May – Extra steps to becoming a resilient business This is a three hour online boot camp teaching how to combine online and offline sales to become a resilient retailer. Taught by experts it will cover what livestream retail is and how you can build it into your business, customer service, how having a brand with purpose sells well both online and in real life and how to build sustainability into your business practices. Tickets for the boot camps are available from Enterprise Nation.

If you are considering winding down your company with financial problems that has been trading for two years or longer, you may be entitled to a directors redundancy payment. This payment comes from the National Insurance fund. You may also be able to claim other available statutory payments such as holiday pay, owed wages and notice. There are certain criteria that make a company director eligible for redundancy payments. To qualify you must: Be an employee of the company as well as the director, meaning you must be involved in the practical running of your company. Have an employment contract which is written, oral or implied. A written contract would be better to be able to prove you are an employee. Have been employed by your company for two years or longer. Have put 16 hours or more work into your company each week. How much a company director can claim in redundancy payment during company liquidation can vary. The amount you can claim depends on many factors including how long you have worked for the company, how old you are and how much wage you normally draw from your company. These factors are used to determine how much you will receive. If you are aged between 18 and 21, you can claim redundancy pay which is half of your weekly pay for the length of time that you have worked for your company. There is a maximum wage cap of £538 per week and a maximum number of years that you can claim for of 20, though for people in this age group the time cap won't be relevant. If you are aged between 22 and 40, you can claim redundancy pay based on a whole week's pay for every year that you have worked for your company. This is again with a 20 year cap and this time the maximum weekly pay you can claim is £508. For directors who are aged 41 and older the amount available to claim is a little higher at one and a half weeks pay for every year they have worked for their company. This is again based on £508 per week maximum pay and 20 years maximum time working for the company. As well as claiming for a redundancy payment, a director of a company can make a claim for up to eight weeks of arrears of wages, pay in lieu of notice and up to six weeks of accrued holiday pay that they would have been entitled to. As a director of a company being liquidated, you would not need to pay any tax on your redundancy pay but you would still need to make tax and national insurance contributions on any holiday pay or unpaid wages that you claimed. Pay in lieu of notice can be claimed at a rate of one week’s notice for each year that you have worked for your company. This is capped at 12 years. If you want to try and claim for directors redundancy pay then the first thing you need to do is talk to an insolvency advisor to see if you meet the criteria for claiming and if so, how much you would be entitled to. you should contact your company’s insolvency advisor to determine whether you, as a director, fulfil the criteria for directors’ redundancy pay and, if so, how much money you are entitled to. You would then need to apply to the National Insurance Fund through your company liquidator when liquidating your company or within six months of company liquidation. In a few cases this can be extended to a year. If you would like to talk to someone today for free advice about company liquidation then you can fill in our online form , call us or whatsapp us. An advisor will get back to you as soon as they are free to discuss your circumstances and what options may be available to you.

When a limited company becomes insolvent, there is protection from liability for the company directors via something called the "veil of incorporation". This means the company is seen as a separate legal entity to the directors when sorting out the company finances and the director will not usually be held personally liable for the debt. With sole traders, there is a difference in that the sole trader isn't a separate entity to the company. This means that in this circumstance it will usually become a personal insolvency issue rather than a business insolvency issue. The sole trader will be entirely responsible for the business debts because the business and the sole trader share their finances. A sole trader's business can become insolvent over time, especially due to not being able to pay creditors, not being able to sell stock and high outgoings compared to profit. If there is insufficient money to pay day to day business expenses then the business won't work. Sole traders can also find themselves out of work for long periods due to circumstances they have no control over such as sickness or low custom. It is very important, if you find yourself getting into this position, that you seek insolvency help from a professional because if your business becomes insolvent, as a sole trader, you will have the business debts added to your own personal debts and you may even find yourself in the position of having to go bankrupt. There are options for sole traders who become insolvent. One of these options is an Individual Voluntary Arrangement or IVA for short. This is a legally binding agreement that usually lasts around 5 years. It is negotiated with the creditors and a monthly amount is agreed that is shared between the creditors. After five years, the rest of the debt is usually written off. An Insolvency Practitioner is responsible for setting this up for an individual. An IVA would improve cash flow for the sole trader, enabling them to better afford their debt repayments. It would also enable the sole trader to keep trading if they thought that would be financially viable. There is a risk for sole traders of enforced bankruptcy. This is where a creditor who is owed £750 or more and has not managed to recover the money from a County Court Judgement, can petition for the sole trader's bankruptcy through the court. It has now become usual for HMRC to choose this option when trying to recover tax and National Insurance debts. There may still be the option for a sole trader to negotiate an IVA in this circumstance so it is worth them talking to someone to see where they stand. If your business is struggling with debts and you are unsure of your financial future then you can talk to us for advice by filling in this online form. You can also call us or whatsapp us and someone will give you a call as soon as they are free to discuss your circumstances and advise you on your options.