Phoenix Companies: the lowdown…

What is a phoenix company?

A ‘phoenix company’ arises where the assets of one limited company are transferred to another legal entity. This usually happens when a business is sold as a ‘going concern’ out of a formal insolvency, such as an administration or liquidation.  Often some or all of the directors remain the same; approximately 85% of ‘pre-packs’ result in sales to connected parties.  The product of this is that, to the outside world, a new business appears to ‘rise from the ashes’ of an old one.

Is this legal??

Whilst this can be a source of frustration to creditors, who may feel it unfair that a director is able to effectively ‘write off’ their debts and continue their trade in another guise, it is wrong to assume that all businesses fail as a result of misconduct on the part of the directors.  A large proportion of businesses fail as a result of factors that are outside of the directors’ control.  It would be harmful to the culture of enterprise that we are free to enjoy if legislation prevented directors from trading with a new business in these circumstances.

What about ‘serial phoenixers’??

Creditors may rest assured that there are a number of measures in place to ensure that the process cannot be abused.  For example, when taking steps to sell a company in this manner, the Insolvency Practitioner must ensure that they are able to evidence that the assets have been purchased for the best possible price.  However, it is important to remember that a discount may be applied on the basis of the ‘quick sale’ resulting from the company’s circumstances.  Under these circumstances, the Insolvency Practitioner must provide an explanation, to creditors, of the commercial pressure faced by the company which resulted in the need for a ‘quick sale’ at a reduced rate.

In order to satisfy creditors that the failure of the business is not the result of dishonest or unfit conduct, an onus is placed on the Insolvency Practitioner to ensure that thorough investigations into the directors’ conduct are carried out.  Where the directors are found to have acted improperly, it would not be appropriate for the Insolvency Practitioner to allow the directors to purchase the business as a ‘going concern’.  In such circumstances, the Insolvency Practitioner will take steps to report the directors’ conduct to the Insolvency Service.  The Insolvency Service may elect to liaise with the Secretary of State, who has the power to disqualify a director where he believes it to be in the public interest to do so.

For more information as to the investigative powers held by the Insolvency Service, please click on the link below:

If you have any queries about phoenix companies, or insolvency more generally, please do not hesitate to contact the team at Dunion & Co. on 01782 828 733.

Start-ups relying on personal savings…

NEARLY 40 per cent of start-ups have had to use their owners’ personal savings to stay afloat over the last 18 months, according to a recent survey carried out by Hitachi Capital.

It said that start-ups, defined as firms that are less than five years old, were twice as likely to use their owners’ money than firms that have been trading for 10 years or more.

Hitachi’s survey of 1225 businesses also found that 15 per cent of start-up owners have turned to family members for loans over the last 18 months.

Hitachi Capital business finance managing director, Gavin Wraith-Carter, attributed the findings to the feeling among start-up and small business owners that the big banks will not give them the finance they need.

Most small business owners can identify with the challenges of securing funding for their businesses.

Whilst many business owners claim that it is difficult to obtain finance through traditional sources, it is important that businesses look to those alternative means of funding that are available.

Some examples of which are:

  • Equity Crowdfunding
  • Peer to Peer Lending
  • Property Finance
  • Invoice Finance
  • Asset Based Lending

For more information on alternative funding, please do not hesitate to contact Dunion & Co. on 01782 828 733 or

Sources: Hitachi Capital / Sunday Express

‘Spotlight on…a Dunion & Co. Case Study’


SOFTWARE DEVELOPERS – Creditors’ Voluntary Liquidation

The Company was incorporated on 1 December 2009 and its principal activity was that of software development for E-learning courses.  The Company had recently rebranded, but trading had been difficult over the previous couple of years, partly due to the employment of a sales individual who did not generate the sales anticipated. Due to the lack of new work, the Company was suffering acute cash flow issues.  As a result of these cash flow issues the directors sought advice from Dunion & Co Limited.

“I approached Diane after meeting her at a business development function.  Following the realisation that I needed some advice I arranged a free consultation with Diane and Ben. Given the circumstances and the cash flow issues the company was suffering I could see that there was no option other than to liquidate the company.  I have felt nothing but relief since picking up the telephone to Diane and her team.   Their support was invaluable and I remain grateful for their ongoing assistance.  To be able to pick up the phone and speak directly to the Insolvency Practitioner is a great comfort and also means that you receive a personal service.  Dunion & Co. comes highly recommended by me!”

Mrs C, Company Director

To discuss further, please do not hesitate to contact the Team at Dunion & Co. | 01782 828 733 |

“Yes…we’re facing difficulties, but is our company ‘insolvent’?”

The Insolvency Act 1986 provides two tests for insolvency:

If a company is deemed to be insolvent as a result of failing either test, the directors should seek professional advice from a Licensed Insolvency Practitioner to clarify their situation and determine an appropriate course of action. Taking advice is a positive step and will not necessarily lead to the Company being liquidated.  The earlier that an Insolvency Practitioner is approached, the more options there are available to them.  For example, refinancing options or ways in which to reduce business debt.

Directors have a duty to minimise losses to the company creditors; therefore, they shouldn’t continue to trade unless they have good reason to believe that the company will return to profitability and be able to repay creditors.

Failure to do so may lead to the directors being disqualified from acting as company directors in future, or even becoming liable for the debts of the company.

The Tests…

The Cash Flow test

  • The cash flow test checks whether the company can meet its obligations, i.e. whether it can pay its debts as and when they fall due.
  • This is a relatively simple test, with an easily identifiable outcome.  A company director has a legal obligation to understand the company’s financial position and should know whether the business is comfortably able to meet its liabilities…or whether it’s facing pressure as a result of them.

The Balance Sheet test

  • The balance sheet test reviews the assets and liabilities of a company.  If the total asset value is less than outstanding liabilities, the business is considered insolvent.
  • Contingent or prospective liabilities should be included within the test. For example, if a decision is imminent in respect of ongoing Court proceedings, and a liability is likely to arise as a result, a sensible estimate of this liability should be included.
  • It is important to be prudent when reviewing a balance sheet; the risk is that a ‘solvent’ balance sheet may include items that are overstated, such as work in progress, or debtors which are unlikely to be realised.  This is something to consider when you are drafting your accounts, as you are legally required to present accounts that show a true and fair picture of the business.
  • You may review the balance sheet and decide that the company is not insolvent therefore they do not need to act.  However, under the cashflow test above the company may still be insolvent. So you must act if it is.


Get Help Now

If you would like any more information about cash flow/balance sheet tests, or if you are at all concerned about insolvency, please do not hesitate to contact us.  We will gladly hold a free, no obligation meeting to discuss all your options.

01782 828 733 | |

Are you struggling to pay your tax/VAT liabilities? If so, you are not alone.

Here at Dunion & Co. we get approached on a regular basis by directors in respect of company tax debts, yet beneath a temporary blip there is an otherwise profitable business. It is common for a director to think that because they have problems with tax arrears, the business must go into administration or liquidation before HMRC takes matters into its own hands. The fact is that HMRC do not enjoy winding up companies or exercising other available collection methods. Enforcement procedures are generally used as a last resort or where there is reason to believe recovery of their liability is at risk.

When a business has a temporary cash flow problem HMRC, will consider reaching a time to pay agreement. The Business Payment Support Service was set up in November 2008 and can grant additional time to pay for all forms of taxation arrears. However, this is not a tool to defer taxation liabilities indefinitely but a method of supporting viable businesses that are suffering short term cash flow difficulties and are designed to help businesses get back on their feet.

It goes without saying that the Business Payment Support Service is looking for the shortest period necessary for payment and will generally not consider anything longer than 12 months. For those businesses with tax liabilities in excess of £1 million the taxman will also require that an independent review is undertaken by a qualified professional adviser, such as an insolvency practitioner.

Get Help Now

The Team at Dunion & Co have a good working relationship with the Business Payment Support Service. Should you wish for us to have a conversation with them on your behalf, please do not hesitate to get in touch with us for a confidential, no obligation, free initial consultation.

Contact us on 01782 828 733 or

Posted in Tax

The Challenges of 2018…

Research from Begbies Traynor reveals that nearly half a million businesses across the country ended 2017 in a state of ‘Significant’ financial distress, as potentially 2018 looks set to be another challenging year for the UK economy. *


If you have concerns about your business, be sure to seek advice at the earliest opportunity.  The earlier guidance is sought, the more options there are likely to be available.  Whether it be a restructure of current business operations, or whether you require additional funding to assist with cash flow or growth, the Team at Dunion & Co. can help.

CONTACT US for a confidential chat – FREE of charge, with no obligation.


*BTG Global Advisory, 17 January 2018

Top Ten Bizarre Excuses for not submitting a tax return on time!

HMRC has revealed the ‘top-ten’ most bizarre excuses it received from taxpayers who didn’t complete their tax return on time:

  1.  My tax return was on my yacht, which caught fire.
  2.  A wasp in my car caused me to have an accident and my tax return, which was inside, was destroyed.
  3. My wife helps me with my tax return, but she had a headache for ten days.
  4. My dog ate my tax return…and all of the reminders.
  5. I couldn’t complete my tax return, because my husband left me and took our accountant with him. I am currently trying to find a new accountant.
  6. My child scribbled all over the tax return, so I wasn’t able to send it back.
  7. I work for myself, but a colleague borrowed my tax return to photocopy it and lost it.
  8. My husband told me the deadline was the 31 March.
  9. My internet connection failed.
  10. The postman doesn’t deliver to my house.

HMRC said that customers who provide a reasonable excuse before the deadline can avoid a penalty after this date.

However, the excuse must be genuine and HMRC might ask for evidence.

There is a fixed penalty of £100 if you miss the filing deadline, with additional penalties to follow…


If you are struggling to meet with the deadline due to cash-flow difficulties, please do get in touch with the Team at Dunion & Co. to see how we can assist. Initial consultations are free of charge.




  • Carillion owes up to 30,000 businesses around £1billion in unpaid costs*
  • Tens of thousands of employees are likely to suffer significant cuts to their pensions following its collapse*

If you are facing financial difficulties in light of Carillion’s demise, it is important that you seek advice in order to minimise the risk that you may face. 

The Team at Dunion & Co. can provide free* advice as to the options available to you:

  • Advice regarding your personal finances
  • Assistance with business debt
  • Restructuring your business
  • Funding to assist with cash flow

*An initial confidential consultation is free of charge, with absolutely no obligation.

Contact the Team on 01782 838 733 or Or, visit our website:




CARILLION: What Next for Employees?

Carillion employs 43,000 staff globally, 20,000 of them in the UK.

Ordinarily in a Compulsory Liquidation, employment is automatically terminated on the date of the winding up order.  However, Government Minister David Lidington has advised that “All employees should keep coming to work…” and that they “will continue to get paid.”

It is widely reported that the Government plans to provide funding in order to maintain a number of public services contracts.

However, those employees who find that their employment has been terminated will be entitled to apply for certain payments, from the National Insurance Fund:


  • Where the Employee has worked for two or more years for employer, they may claim one week’s salary for each complete year worked (subject to restrictions)

Statutory Notice Pay IF

  • Employee has worked statutory notice period, but not paid by employer
  • Employee was dismissed without notice
  • Employee does not work full notice period

Statutory Notice Period

  • One week’s notice if employed for a period of between one month and two years
  • One week’s notice for each year if employed between 2 and 12 years
  • 12 weeks’ notice if employed for 12 years or more

Payments are limited to £489 per week.

If an employee is sick or becoming a parent, they may be entitled to:

  • Statutory Sick Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Adoption Pay

Should you wish to discuss the contents of this article, please do not hesitate to contact a member of the team on 01782 828 733 or

5 Reasons to File Your Tax Return Early!

  1. Quicker receipt of Tax Refunds

Whilst you are not obliged to pay any tax liability early, you can make a claim for monies owed to you.  You are likely to receive your refund much faster if you file your return early, as HMRC will be processing fewer returns.

  1. Good for Cash Flow

Your tax return may give rise to a tax liability.  The earlier that the return is submitted, the longer the period over which payments can be made. This will inevitably help with cash flow, allowing you to incorporate payments into your cash flow forecast.

  1. A Stress-Free Christmas!

……you will be able to enjoy turkey and tinsel, without the stress of a last-minute tax return hanging over you!!!

  1. Getting in Touch with HMRC

Trying to get in touch with HMRC can be difficult at the best of times, due to a reduction in staff.  Add into the mix the fact that many other people have last minute tax return queries and you have a recipe for a long period of ‘on-hold’ music!

  1. Avoiding Penalties

Penalties are now significantly more than they used to be…and they are automatic.  Filing your tax return early means that you will avoid penalties altogether.


The team at Dunion & Co. work alongside a number of trusted business partners, who can assist with the submission of your tax return. 

If you have any queries, or need assistance to get it prepared and filed on time, please do not hesitate to contact the team on 01782 828 733 or

Posted in Tax