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Protect Your Business From HMRC's Preferential Creditor Status

From the 1st December, HMRC will regain their preferential creditor status under the Finance Act 2020.

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In short, what this means to businesses such as yours is this...

  • HMRC move higher up the payment 'pecking order' to be paid.
  • HMRC will be paid before any company pension schemes, floating charge holders or creditors
  • If your customer goes bust, HMRC will be paid before you!

Therefore, any amounts owed to HMRC for VAT and PAYE/NIC by failed businesses will be paid before you, the Supplier.

The HMRC creditor risk to you is real!
This could mean that you, as a supplier to any business in liquidation or administration, will not be remunerated if those above you in the payment order have exhausted all available funds.

The fear is that many more businesses who have struggled owing to the detrimental effects of lockdown will likely owe HMRC monies. Partly due to lack of cashflow to cover taxes (a common problem) yet even more so now, as a result of the Government's Time To Pay deferred VAT scheme. It could see many failed businesses owing substantial amounts to HMRC having deferred from last year's tax year, as well as that due from this tax year.

Now, more than ever, it's vital your business looks to protect itself from vulnerable clients; looking at bad debt protection finance options and a robust credit control function.

Your answer to late payment & peace of mind offered by bad debt protection
Here at Capital Corporate Finance we are experts at setting up invoice finance facilities and can also offer credit insurance to protect you from customer failure.

This means you do not wait to get paid from your customers – often exceeding 60, 90 days +. Instead you issue your invoice and your finance provider effectively pays you straight away. In the event of failure, a credit insurance policy will mean you do not lose out.

FACT: In 2019 70% of invoices were paid late.

Invoice finance is quick to set up, easy to manage and offers over 44,000 businesses in the UK financial stability.

  • Advanced payment on each issued invoice of up to 90%
  • Payment issued within 24hrs
  • Balance paid once your client settles their invoice
  • Back office credit control inclusive as part of your invoice finance facility
  • Facility flexibly and organically grows with your business enabling quicker growth and
    expansion for your business

Invoice finance is not a loan or any other type of lending. It is the advancement of monies owed on issued invoices. Nor does it require you to put up assets or collateral as security– your issued invoice is your asset; which means it's also ideal for newly established SMEs, as well as those with many years experience behind them.

You can also choose from invoice discounting which ensures your finance arrangement is kept confidential from your clients or selective invoice finance which means you can choose which invoices you factor – ideal for ad hoc, larger invoices.

FACT: 1 in 3 SMEs seriously consider closing their business due to late paying customers.

ARRANGE NOW: Do not risk your business failing, simply because your customers have failed.

Instead, gain peace of mind, a fluid cashflow and a more solid future for you and your business.

Call me today, Founder and Managing Director, Carole Roe – my direct number is 07785 596053 or you can email me on carole@capitalcorporate.co.uk