The imminent, inevitable, incontrovertible demise of the UK High Street has been written about many times in recent years. So much so, that I have never really thought it worthwhile to put together a piece on a subject that is well travelled ground. Hardly a week goes by without another old established department store group or celebrity chef chain throwing itself at the mercy of its creditors by attempting to downsize and restructure through the Administration or Company Voluntary Arrangement insolvency processes, resulting in closed outlets and job losses.
Well that was until earlier this month [the same month that saw the demise of Woolworths 10 years ago] when I started to see the number 14 combined with the words High Street everywhere.
Let me explain.
At the beginning of the month, one of the “Big Four” accountancy firms came forward with a report showing that High Street shops were closing at the rate of 14 per day in the UK’s top 500 High Streets. The gap between closures and openings has widened to a record level, but it is suggested that closures may have stabilised. The reasons for the decline are well known:
“Long firm fraud” given a helping hand by the openness and visibility of the information at Companies House...
As my long departed Great-Grandmother used to say to me “There’s nowt new under the sun”. Long firm fraud has probably been around as long as credit itself - a nice little earner, much used back in the 1960s by East End villains, has not gone away and in this era of increasing identity theft, this type of fraud is very much on the increase.
How do you kill a Zombie company? by having an interest rate rise of course!
In November 2015 we reported that Zombie companies-those businesses that can just about pay the interest on their bank debts, but little else, had seen a dramatic decline [much to the chagrin of us Insolvency Practitioners].
Not so lovely jubbly
Restaurant chains continue to suffer in today’s economic climate-a sector that often leads the way in a full blown recession.
Jamie Oliver’s Italian restaurant chain has recently had to report that it is suffering cash-flow problems....
Unfortunately, we have to report that HMRC now require the payment of statutory interest at 8% per annum from the commencement of a solvent liquidation [Members’ Voluntary Liquidation aka MVL] on any Corporation Tax that falls due after commencement of the liquidation, even if the normal due date for payment is not due until after the commencement of the liquidation, and the payment is made before the due date.
When I tell people that I am an Insolvency Practitioner, the universal response is almost always “Well you must be busy”-that and the fact that they usually take a couple of steps backwards.
Now, when I tell people that I am an Insolvency Practitioner, most people say “Well, you are going to be even busier, what with the Brexit Effect”-and of course, the couple of steps backwards.
Well, Sergeant George Dixon of Dock Green Police Station was certainly a reassuring presence on my grandmother’s black & white TV back in the 1960s. Never saw the good Sergeant lose his temper, break into anything other than a leisurely, but dignified amble, or employ any weapon more dangerous than his notepad and pencil, but he always got his man [it was always men back in those days] and kept the community of Dock Green safe for another night.