HM Revenue & Customs “Time To Pay” support is welcomed

The growing scale of economic disruption amid volatility in financial markets as a result of the coronavirus (COVID-19) mean urgent steps are required to restore business confidence. As a result, businesses should welcome the fact that the government has taken steps to expand support offered through Time To Pay (TTP) arrangements in the recent Budget and in the 20 March announcement. This is according to Duff & Phelps, the global advisor that protects, restores and maximises value for clients.

Giving firms more time to pay VAT, payroll taxes and Corporate Tax—in effect expanding HM Revenue & Customs (HMRC) TTP scheme offering support through extended payment terms—has sent a strong signal that the government is listening to the concerns of business leaders who are worried about the impact of COVID-19 on cash flow.

The announcements made on 20 March also included a new Coronavirus Job Retention Scheme as well as deferred payments on the next quarter VAT payments until the end of June 2020. Businesses then have until the end of the 2020/21 tax year to settle any outstanding liabilities.

When facing financial pressures, and where cash is a commodity, a TTP arrangement with HMRC can be a key component of a successful turnaround plan that preserves an enterprise and safeguards jobs. Given the current economic turmoil, it may well be a critical tool in the economic armoury, preserving the integrity of British businesses.

David Fleming, Managing Director, Restructuring Advisory, Duff & Phelps, stated: “A TTP arrangement with HMRC is a structured repayment plan for any outstanding tax obligations. Companies that have defaulted on their payments in relation to Corporation Tax, VAT and/or PAYE can ask HMRC for additional time to pay. They assess the business case and can provide repayment plans that typically extend to 6-12 months.”

As part of a package of measures, the government has launched a Coronavirus Business Payments Support Service specifically to help businesses in arrears with existing tax liabilities up to circa £100,000. Larger liabilities are expected to be dealt with on a case-by-case basis. Furthermore, the government launched a new helpline to support businesses and self-employed people who are concerned about not being able to pay their tax due to the financial impacts of COVID-19.

In addition, the Chancellor announced a refund on all Statutory Sick Pay up to two weeks for all businesses under 250 employees. Business Rates Relief was also dramatically expanded for those businesses in retail, hospitality and leisure.

Fleming added: “HMRC is committed to supporting businesses via TTP arrangements that can demonstrate viability and present a strong case for support. Given the impact coronavirus is having on a broad range of industries, we would argue that TTP expansion will not only consider those businesses that have already defaulted, but also those that are trying to find solutions with an immediate need for cash.”

The government has also launched the Coronavirus Business Interruption Loan Scheme (CBILS) to support long-term viable businesses who need additional finance for cash flow issues.

Fleming added: “This scheme will be delivered by the British Business Bank (“BBB”) and will launch in “a matter of weeks.” Whilst BBB will provide a guarantee of 80% of the loan, the loans are expected to be approved and made by the clearing banks and other authorised lenders. There will be per lender caps and the scheme will support loans of up to £5m.”

Fleming continued: “The decision to expand TTP and even provide a holiday in relation to interest and penalties resides with the government. Through BBB and TTP it is our belief that the way HMRC operates will have a major, sustained and positive impact for businesses throughout the UK. But this is a changing situation and more action may yet be announced by the Chancellor.”

Duff & Phelps’ Tax Arrears Solutions team can work with companies, their funders and other stakeholders to determine whether a TTP arrangement is the right course of action. The Tax Arrears Solutions team works closely with specialists from Duff & Phelps’ Operational Improvement team. This dynamic complements a company’s overall restructuring programme, assisting in quickly assessing and resolving any cash flow difficulties on a workable basis with a full understanding of the operation of any borrowing facilities. The team also works closely with lenders to facilitate distressed refinances, with a TTP arrangement often providing the additional headroom needed for deals to complete.

If lenders’ clients are considering approaching HMRC to defer a tax payment, regardless of the type and size of the debt, Duff & Phelps can immediately help to assess the position and quickly determine the options available.

Duff & Phelps has secured TTP arrangements for over 80 companies since 2018, helping to safeguard their viability and preserve more than 5,000 jobs.

Spicerhaart Corporate Sales calls for 80% rental income guarantee for small landlords

Asset management specialist Spicerhaart Corporate Sales has called for the Government’s 80% salary guarantee to be extended to rental income for small private landlords.

The call follows new measures put in place to protect tenants from eviction as the covid-19 coronavirus spreads across the country.

Last week it was announced that all possessions activity would be frozen for an initial period of three months. Existing possession claims will not progress through the Courts and no new claims can be entered during this period.

Mark Pilling, managing director of Spicerhaart Corporate Sales, said: “Eviction is always a last resort, never more so than with a deadly pandemic on the loose.

“While a blanket freeze on all possessions activity will protect tenants in the short term, it is bound to lead to an accumulation of arrears that will be all the harder to deal with once the freeze is lifted.

“If there seem to be no consequences to non-payment, some struggling tenants will naturally prioritise other bills, and will be more likely to ignore attempts to communicate with them to manage the situation.

“A three-month ban on possessions activity will result in even longer spells without rental income – possibly six months or more of state-enforced void periods.

“Payment holidays on buy-to-let mortgages will be of limited help to landlords who in many cases rely on income from a small number of properties. If one or more of these is not generating an income for an extended period, it could cause families real financial difficulty.

“Rental income is subject to income tax – to say nothing of the Stamp Duty premium paid by B2L landlords. It seems only fair that it should be subject to the same Government guarantees as other income affected by the restrictions currently in place.”

Hoist Finance Launches New Sustainability Strategy

Hoist Finance, a trusted debt resolution partner to individuals, companies and banks, today announces its new sustainability strategy, which outlines the company’s Environmental, Social and Governance (ESG) goals and indicators. The sustainability strategy and extensive reporting puts Hoist Finance as a front runner in the debt management industry.

Through a bottom-up process, integrating feedback and insight from employees throughout the whole organisation, Hoist Finance developed a sustainability strategy focused on four core pillars: contributing to an inclusive financial ecosystem, creating a great place to work, combatting climate change, and upholding the highest ethical standards. The new framework also presents Hoist Finance’s relationships with employees, banks and financial institutions, customers, communities and the society as a whole.

The new strategy sets out Hoist Finance’s ambition to support new innovations to improve financial access and services. Financial inclusion is a growing challenge in Europe with €636 billions of non-performing loans putting pressure on the European economy and a household debt amounting to 93.49% of gross income. To protect the most financially vulnerable people in society, Hoist Finance only buys non-performing loans from reputable banks with a sound credit policy and actively turns down portfolios from some parts of the consumer finance markets including pay-day loans and SMS loans.

Klaus-Anders Nysteen, CEO of Hoist Finance said: “Hoist Finance has solid experience in helping people keep their commitments through financial difficulties. In times like the ones we are living through now, it is particularly important to stay close to our customers and help them find a way forward. By deploying our core competency, Hoist Finance helps people back into financial inclusion.”

Ingrid Bonde, Chair of the Board added: “At Hoist Finance, we believe that the business world has a vital role in supporting governments and communities in tackling financial exclusion and ensure that everyone has access to affordable financial services. Our new approach to sustainability offers a coordinated and comprehensive programme to help us positively impact our communities and the society.”

Aligned to the UN Sustainable Development Goals and the United Nations Global Compact, the strategy includes measurable goals and indicators aimed at creating sustainable and healthy credit markets that are accessible to all.

The strategy is available in Hoist Finance’s Annual Report 2019 published today on: annualreport.hoistfinance.com.

More information

  • In 2019, Hoist Finance set up 200,000 sustainable repayment plans with customers in debt across ten markets (Belgium, the Netherlands, France, Germany, Austria, Greece, Italy, Poland, Spain and the UK).
  • On average, the company has 170,000 customer dialogues per month.
  • The average monthly customer payment is €
  • Hoist Finance has recently launched new digital services available to customers through WhatsApp, Rich Communication Services and the chatbot Kai.
  • In 2019, 15% of all collections were from digital channels.

Hoist Finance confident banks will continue to divest

Hoist Finance, the trusted debt resolution partner to individuals, companies and banks, believes the outlook for the debt purchase market remains positive, despite there being a temporary pause in the supply of debt portfolios.

Writing in the Hoist Finance annual report published today (March 30), Chief Executive Officer Klaus-Anders Nysteen says he anticipates that banks will continue to divest portfolios and will do so at an earlier stage than historically.

“The European estimated loan stock has decreased from EUR 1.2 trillion in 2014, to approximately EUR 635 billion in 2019,” he says. “This is good for the financial eco-system, and I am confident in the market for non-performing loans as all market participants have become more diligent and structured, which has resulted in favourable margin developments over the last year. There is also an increased amount of transactions in the secondary market, both for non-performing loans as well as for performing loans.

“If we can offer customers and employees the best experience possible, both in the current challenging times as well as in the long run, I am convinced financial performance will benefit,” he continues. “This is why operational excellence will continue to be a priority in 2020, underpinning our capacity to deliver attractive returns going forward, while maintaining our focus of helping people keep their commitments.”

To coincide with the publication of its annual report, Hoist Finance also launched its new sustainability strategy which includes its continued commitment not to buy portfolios of non-performing payday loans.

“To protect the most financially vulnerable people in society, Hoist Finance only buys non-performing loans from reputable banks with a sound credit policy and actively turns down portfolios from some parts of the consumer finance markets including pay-day loans and SMS loans,” Klaus-Anders concludes.

COVID-19/Corporate insolvency framework changes – response

Duncan Swift, President of insolvency and restructuring trade body R3, responds to today’s announcement of changes to the corporate insolvency framework: “The UK has a world-leading insolvency and restructuring framework, and the new restructuring tools in this package give our profession more options to help businesses navigate COVID-19 disruption. We’re pleased Government has listened to the profession’s feedback and is focused on making these tools accessible for the businesses that need them.

“The details of how exactly these tools will work are still to be fleshed out, but we’re hopeful that the Government will address many of the concerns the profession has expressed about the reforms since they were first announced in 2016. The moratorium, for example, will not be useful if it can’t be accessed by insolvent companies. It’s important that, as the Government works on the details, it listens to creditors – including lenders, the wider business community, and landlords – on how they will be affected by the moratorium.

“Until the tools are introduced, the profession will continue to use the wide range of tools it has at its disposal to help restructure businesses and rescue jobs.

“The profession will, however, have some serious concerns about the Government’s plans to suspend wrongful trading. A blanket suspension could risk abuse. The provisions are there for a reason and protect creditors. We do understand that directors may be worried about the consequences of continuing to trade amid the COVID-19 disruption if they’re missing debt payments, but good advice from an insolvency practitioner or insolvency lawyer will remove their risk of facing a wrongful trading action.”

Lowell announces extended COVID-19 customer commitments

Lowell, one of the largest credit management companies in the UK, has today published a list of commitments to minimise the financial burden of existing debts on its customers during this unprecedented health crisis. The commitments, which have been aligned with views from debt advice sector, are designed to help those with financial difficulties caused by COVID-19.

Lowell has implemented measures, which it hopes others will follow, for its 7 million customers to help those struggling with debts across the UK during the COVID-19 crisis.

John Pears, UK Managing Director at Lowell, said: ”Our priority has always been understanding our customers and their situations, however difficult, and delivering solutions that are right for them. During these unprecedented and uncertain times, we understand that many of our customers may be struggling. We are here for them.

“By consulting with the debt advice sector, we have made sure our plans are aligned with their view of the right customer approach. We want to ensure that all our customers have access to the flexibility of payments, and even respite, they need. If you are struggling, do not sit at home and worry, let us know and we will help.

“We believe that every business, particularly in our industry, should have clear commitments to those customers dealing with COVID-19, and that these should follow the principles of understanding, compassion, flexibility, trust, and support.”

These six commitments are:

  1. Extended breathing space – We will give customers impacted by COVID-19 more time to help them take control of their finances; increasing breathing space from 30 to 90 days.
  2. No interest, fees or charges – We will continue to not add any interest, fees or other additional charges on managed accounts; balances will not increase as a result of arranging to lower or suspend payment plans.
  3. Additional payment flexibility – We will enhance the existing payment flexible approach for those most acutely impacted. Those impacted by COVID-19, such as those on a reduced income, simply need to contact us to discuss amending or suspending plans for as long as needed.
  4. No new litigation claims or bailiff action – We will not issue any new claims or request any new bailiff action during the crisis.
  5. Maintain customer support – We will continue to be available for customers where they choose to contact us either over the phone or online. We’ll continue to invest in new online support services.
  6. Increased signposting guidance – We will work tirelessly with our debt advice partners, such as StepChange, and the Government to understand how customers’ circumstances are changing in order to provide up to date advice and support. Given the debt advice sector is seeing high levels of additional demand, we will do even more to signpost the variety of help available to customers in order to spread that load.

Sensée announces 1000 new UK work-at-home contact centre jobs

Homeworking specialist Sensée is creating 500 new permanent and 500 new temporary positions to meet the growing demand from its clients for work-at-home staff.

The vacancies are for Customer Contact Advisors, Team Managers and back office staff to work for new and existing clients – including Bupa and Hastings Direct – as well as for a number of Government departments. Start dates are immediate.

Sensée is welcoming applications from people of all backgrounds, levels of experience, gender and age. Contact centre experience is preferred but not essential. Customer service and other job-specific training is provided.

“We urgently need new home workers to help our clients support their customers through the current crisis” said Mark Walton, CEO of Sensée. “Over the coming months, homeworking will have a crucial role to play in ensuring business continuity for private sector firms, as well as the effective management of citizen and business enquiries within the public sector.”

Chancellor COVID-19 self-employed announcement – response

Duncan Swift, President of insolvency and restructuring trade body R3, responds to the COVID-19 self-employed support measures announced today (20 March) by the Chancellor, Rishi Sunak MP: “Even without the current coronavirus outbreak, self-employed people and sole traders often have unpredictable income levels, making it harder for many to save for a rainy day. The Government’s announcement is a welcome, if limited, step towards evening out the support available for workers across the economy.

“The limitations do stand out. The self-employed will have a sizeable gap to bridge between now and June when the help will actually be available. That could be too long to wait for those with no safety net. There are quite a few gaps in the support: for people who have only recently started working for themselves or who pay themselves through dividends, there may be no help at all.

“Anyone who is in financial difficulty or starting to see signs it may be around the corner should seek advice from a professional as soon as possible. The earlier you seek advice about your personal finances, the more considered a decision you can make, and the greater range of options you have for improving your situation.”

CIVEA confirms suspension of enforcement action

In response to speculation that enforcement activity will continue during the COVID-19 crisis, CIVEA has written to Ministers as Russell Hamblin-Boone, chief executive of the Civil Enforcement Association, explains: “We have worked closely with the Ministry of Justice to ensure that people are protected during the cornovirus crisis. Despite the false information circulated by debt advice charities, enforcement agents are not enforcing debts. Many agents are working with the NHS to support the voluntary initiative and many firms have changed the use of their fleet vehicles to support deliveries of supplies. Where people are being contacted it is to extend payment plans or offer payment holidays. Our letter to the minister reads:

Dear Minister,

COVID-19: Suspension of enforcement activity

We have been in close contact with Ministry of Justice officials as the COVID-19 pandemic has developed. This letter is to update you on the current situation regarding civil enforcement activity.

Along with many other activities public debt collection is rapidly being scaled back. In order to reduce the burden on families many local authorities are suspending or significantly reducing debt collection services.

In order to protect staff and the public, CIVEA has provided best practice guidance to all our members. This has been discussed with Ministry of Justice officials and development in conjunction with the available government advice. I attach a copy for your information.

In the last week, since the CIVEA guidance was published and government advice updated, there has been a complete suspension of enforcement visits, whether to recover unpaid court fines, penalty charge notices, council tax or non-domestic business rates. Where a skeleton staff continues to operate remotely, local authorities have requested that a Iight-touch communication is maintained. This is primarily identifying vulnerable people and offering extensions to repayment plans and payment holidays.

Where agents and contact centre staff have been furloughed, firms are allowing staff to volunteer to support the NHS voluntary initiative. In many cases, firms have registered fleet vehicles for change of use to be used by volunteers.

Looking ahead, with the suspension of court proceedings there are no new warrants and court orders being issued. We anticipate a back log that will need to be processed. While enforcement activity is suspended, unlike other services, it will be several months before the civil enforcement system is fully back online.

In the meantime, CIVEA and its members will continue to keep in close contact with officials to ensure that they continue to support the courts system.

I am copying this letter to Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government.

Robots to the rescue as lock down grips UK Industry

With Coronavirus gripping the nation and panic buying fuelling the mass sale of hand wash and toilet rolls to the public, the COVID-19 pandemic has sparked the sell-out of another item.

Amidst the frantic switch to work-from-home for many workers, robots are being used to shore up companies’ production as they struggle to keep up with increasing demand. Robot arms can be effectively used to perform a variety of simple repetitive tasks, freeing up staff to do more meaningful work.

At the forefront of this innovation is bots.co.uk, a company that specialises in providing a range of different cobot arms at a hourly rate of £2.70 per hour paid monthly. This concept is really taking off when manufacturing needs to stay operational but the lock down is causing staffing issues. Once installed the robot can be remotely monitored to check the tasks performed and productivity.

Commenting on this soaring demand, a Tim Warrington said: “We have totally run out of robots at the moment but we are due more in the next couple of weeks. Demand for robot hire has risen so fast that we just couldn’t keep up with it.” “food packaging industry as well as plastic moulding companies in the medical sector are the main sectors”