Case Studies

Specialist Recruitment Business

This successful recruitment business had historically performed well financially. However, it began to suffer from cashflow pressures following an MBO, which was supported by an overly aggressive payment plan to meet deferred consideration.

The resulting cash flow pressures, together with a seasonal lull in the business, contributed to the accumulation of PAYE/NI and VAT arrears of £725,000.

Following a financial and operational review, MCR were able to instigate new cash management procedures and to restructure the HM Revenue & Customs tax liability over 8 months. This enabled the company to continue to operate within its funding constraints.

Niche IT Consultants

MCR were called in to help a relatively young IT company offering unique business solutions to large multi-site international organisations.

A protracted shareholder dispute presented a significant distraction from daily business operations, which severely damaged trading activities. The matter was eventually resolved but at a cost to the company.

MCR provided tax arrears advice and put in place a turnaround plan and PAYE/NI and VAT arrears of £402,000 were restructured over a realistic 13 month payment term.

Private School

The school had been struggling for a number of years due to low student numbers and increasingly demanding legislative and administrative requirements.

A succession of refinancing initiatives allowed the school to continue to trade. However, the underlying problems had not been addressed and losses continued to accrue. The benefits of the refinancing were lost and serviceability issues on the high levels of debt contributed to a poor cashflow position.

As a result, tax arrears comprising PAYE/NI of £139,000 were accumulated. With our assistance a stand-still arrangement was secured and, during this period, a sale of the school took place.

The tax arrears were subsequently repaid in full by the new owners.

Toiletry Manufacturing Business

This relatively new company was bought out of administration when its predecessor-company suffered a major fire.

Cashflow difficulties were encountered on account of a number of persistently slow paying customers who subsequently failed, owing the company more than £300,000.

This led to the build up of unpaid tax arrears comprising VAT and PAYE/NI totalling £273,000 as well as substantial trade creditor liabilities.

As part of the turnaround solution, MCR offered tax arrears advice agreeing a repayment plan with HMRC over 11 months and assisted in the refinancing of the business.

High Street Retailer

In a highly competitive retail sector facing slowing consumer demand, this £100m plus turnover company was struggling to meet its financial commitments.

Attempts were made to find external investors which did not prove possible whilst the business's bankers were at the limit of their funding lines.

MCR worked with the company to secure payment arrangements with various landlords whilst rescheduling outstanding tax liabilities comprising PAYE/NI and VAT totalling £2.6million, over a 12 month period.

These actions have eased cashflow and enabled the company to instigate operational changes to ensure continuity of trade.