A special force of crack zombie hunters swings into action today to rid old Blighty of the shuffling scourge of undead firms surviving only to pay the interest on debts. The mission of the task force, whose formation was revealed by The Channel last month, is to build a profile of private equity backed businesses in the IT …
More like a seen from the film "Goodfellas"
Remember the restaurant owner who take the Mafia crew as a silent partner.
Overpriced services. Funnel ingredients out the back door for re-sale and don't pay the supplier.
Then when it all gets too much have a fire
Is anyone seeing an analogy here?
Easy credit leads to bad business decisions leads to liquidations when the economy contracts.
Austrian business Theory in Action!
Made worse by continuing inflationary central bank policies, artificially low interest rates and the hope of reinflating the bubble economy.
Why look out for Zombies. All these companies run up VAT debts then crumple. Why aren't the Directors prosecuted and their assets taken?
How did Comet manage to run up a £50M+ debt on tax? Their credit rating must of been atrocious why were they allowed to owe the tax man anything?
The VAT bill is one of the things businesses 'borrow' from the tax system, they are collecting on the Government behalf its not their money though to hear them talk about "finding the money to pay the vat man" you would think it was theirs.
Any business turning over say £120K should pay VAT monthly on a cash basis (not Accrual which can catch you out). It can be an approx amount which is finalised quarterly with 3 monthly declarations.
So if they are paying £6K / quarter they pay £2k a month this cuts VAT exposure to a third. If it varies massively outside the normal retail fluctuations SIC code norms you can catch this by charging interest.
Any company turning over £120K a year should be doing monthly accounts and rough turnover calculations.
Same with PAYE & corp tax its monthly.
Bigger firms or at risk ones can pay more frequently.
3 strikes and PAY. If the company has failed to pay on time 3 times or more / been caught mis - reporting should be allowed less flexibility on payments. So dodgy companies pay everything immediately.
Smaller firms could be allowed more flexibility but why not pay min 50% of your expected corp tax monthly?
Lets be as hard on reckless firms as we are on reckless benefit claimants there are fewer and we have more control over them. They do not have human rights!
I smell reduced or nil insurance on zombifications...
Tacit, public acknowledgement of 'crack teams' to isolate such firms suggests a few things....
Insurers have been careless and been burnt ...
Insurers, in 'coming out' hope to bring positive reaction from 'zombies'....
Insurers are preparing the ground for lower or no cover at all where debt level and interest paid hits a predetermined buffer...
Got nice list of them myself...
- EU VAT law could kill THOUSANDS of online businesses
- Microsoft says to expect AWESOME things of Windows 10 in January
- ASA slaps Ebuyer AGAIN - this time for ignoring regulator
- Can't stop Home Depot-style card pwning, but suppliers will feel PCI regulation pain
- TALE OF FAIL: Microsoft offers blow-by-blow Azure outage account