Redditch based company, Top Service Ltd the only credit reference and debt recovery agency specifically for the construction industry has announced it will provide staff with a £250 payment in October 2022 to help with the rising cost of living and soaring energy bills.

In addition to the Government’s £200 discount on gas and electricity bills towards the end of the year of which ‘all households with a domestic electricity connection will be automatically eligible for.’ Top Service Ltd will provide all its staff with a ‘one off’ winter fuel payment subsidy of £250 in October 2022. Aimed to help address the concerns many of its forty plus staff have as the cost of living rises due to the unstable global supply of energy which has led to the UK seeing record breaking price increases. 

“At Top Service Ltd we endeavour to do our best to support our employees and with this in mind, we will be providing each employee, with a one off ‘winter fuel payment’. Within the month of October 2022 employees will receive a one off payment of £250.00. We hope that this, along with the support being offered from the Government will go some way to ease any concerns our staff may have with regards to the rises in cost of living,” Emma Miller, Top Service Ltd Joint company Director.

For 30 years plus Top Service Ltd has remained constant in support of the construction sector and its staff providing an invaluable source of support for its members and employees during the pandemic and now in the wake of the worst economic challenges in decades.

Updates and further information on the government energy support scheme can be found on the .gov website: https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

Notes to editors:

Top Service Ltd is the only specialist credit reference and debt recovery agency for the UK construction industry. Top Service currently have thousands of companies subscribing to their service with around 6,000 branches and depots between them, spanning many different sectors in the construction industry. Top Service credit reports contain unique trading experiences which are sourced from thousands of their members, all trading in and around the construction industry. For more than 30 years Top Service have helped the construction industry avoid problem payers and reduce bad debt. All of their members benefit from access to their unique and invaluable credit information and effective recovery services.

About Top Service: /why-choose-us/about-us/

For more information please contact:

Debbie Garner Head of Marketing and Development:
Telephone: 01527 503991
Email: marketing@top-service.co.uk

Written by Zahida Shah, Silverback Commercial Law Services

What is a Purchase Order?

A purchase order is a commercial document whereby one business lets a supplier know they intend to buy goods from them. 

This is the reverse of an invoice because it is a list of items the business intends to buy and will include information such as the price and quantities they wish to purchase.

A Purchase Order will contain key information such as: 

• Purchase Order number
• The date the Purchase Order was issued
• Goods and Services the Buyer requires
• The required quantity of those Goods and Services
• The agreed price
• Delivery costs and details
• Payment Terms
• Other Terms and Conditions

Why use a Purchase Order?

Purchase Orders can be useful documents for both parties.

• Spend Control 
  • For the Buyer, a Purchase Order is important for spend control, and can act as a check and balance to ensure purchases are within allocated budgets. This enables the Buyer to forecast its outgoings at an early stage rather than waiting for invoices to determine their expenditure. They will therefore have a more accurate picture of their financial position at any given time. 

• Promote Prompt Payment
  • For the Supplier, Purchase Orders can be matched to the corresponding invoices and delivery notes, which should promote prompt payment. 

• Record Keeping
  • For the Buyer, it can be a vital part of record keeping because there will usually be a Purchase Order number allocated to each purchase. This will help a Buyer to keep track of exactly what they intend to purchase, at what price and when.
  • For the Supplier, this should assist in accurately supplying those exact items and thereby minimise Supplier errors and scope for disputes. 

• Avoid Disputes
  • For the Supplier, with a well drafted Purchase Order, Suppliers can avoid unnecessary (and common) disputes from Buyers over whether Goods/Services were authorised, which often leads to delayed payment.
  • For the Buyer, it offers some assurance that an invoice received will reconcile with the Purchase Order. Should there be errors or disputes they are easier to reconcile and rectify as there is a coherent record of the agreement.  

What does the Purchase Order process look like in a typical transaction?  

• A Buyer will raise a Purchase Order after the parties have agreed a price
• A Buyer will send the Purchase Order to the Supplier 
• The Supplier then accepts the Purchase Order, if it can fulfil it (and it becomes legally binding)
• The Goods/Services are provided by the Supplier
• The Supplier raises an invoice with reference to the Purchase Order Number
• The Buyer matches up the Invoice and Purchase Order Number
• The Invoice is processed and paid 

Record Keeping Document or Legally Binding Document?

In its simplest form, a contract is formed if there is an offer, acceptance, consideration and there has been an intention to enter into a legally binding agreement.  

The Purchase Order fits in right at the start; it is an offer from the Buyer/Supplier to purchase/supply a goods or services at a certain price.

A Purchase Order is a legally binding document only once it has been accepted by both parties. It is effectively a contract between the Buyer and Seller for goods for the price and terms agreed within. 

A Supplier could raise a Purchase Order and send it to their Buyer customer, and this would act as a notification of the Buyer’s legal obligations to pay the agreed amount. 

Other Considerations 

1. Inaccuracies 

As a Buyer you would need to be aware that, when you receive a Purchase Order, you are obliged to pay the amount on it. If amounts or quantities are incorrect, these should be challenged immediately, and a new Purchase Order must be issued to protect your position. 

2. Terms and Conditions 

Purchase Orders often contain Terms and Conditions, so it is very important to consider these before accepting the Order.  

Quite often, Suppliers will have a Trade Credit Account Agreement with their Buyers, to which its standard Terms and Conditions apply to ‘all purchases’. Accepting a Buyer’s Purchase Order, which contains the Buyer’s Terms and Conditions, could effectively incorporate these additional Terms into the Contract. 

In most cases, these might not be contradictory to your own Terms and Conditions as a Supplier but, without checking, you raise the risk of entering a legally binding contract to which these new terms apply. 

For example, the standard payment terms in your Trade Credit Account Agreement could be overridden by the Purchase Order, extending the time the Buyer has to pay an invoice.

3. Third Party Purchase Orders

Proceed with caution where Purchase Orders indicate that they are on ‘behalf’ of another party. 

These Purchase Orders usually stipulate that a third party should be invoiced, rather than the Buyer. 

If an invoice becomes overdue, and further credit control action is required, this brings some ambiguity to whom the parties to the contract are. It is generally these sorts of disputes that lead to unpaid invoices and proceedings which can be costly and time consuming. 

4. No Purchase Order, No Payment’

As a Supplier, you may receive a request for all invoices to contain a Purchase Order Number or they will not be paid. 

Therefore, in order to encourage swift payment, and reduce the burden on your credit control function, it is vital to keep an accurate record of all Purchase Order Numbers, and to use these on your invoices, where possible.

However, should you not be able to locate a Purchase Order or Number, you should still issue invoices. There is no need to immediately write off or credit such invoices, particularly where you can prove that you have completed your contractual obligations by providing the goods/services in question.

By doing so you will have put the Buyer on notice that payment for goods/service is due. You will have also started the clock running and may be entitled to additional charges such as interest and compensation. 

Conclusion 

Purchase Orders can be highly beneficial to both the Buyer and Supplier in terms of record keeping.  Purchase Orders can also assist a Buyer to control and forecast spending, and assist a Supplier with prompt payment of invoices. 

A business must ensure the Purchase Order is properly worded and the information contained within them is considered and agreed by all parties, whether they receive them or issue them. 

It is good business practice, and vital for general credit management from a Supplier perspective, to regularly review ways of improving your system in respect of Purchase Orders and additional transactional documents such as invoices and Proof of Delivery.

For further assistance in respect of the legal implications of your invoices, or for further advice on how Silverback Law can best support your business, please contact Vishal Mahay, Head of Commercial Litigation on 0844 967 2700 or email vishal.mahay@silverbacklaw.co.uk 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (22 April 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in March 2022 was 2,114:

• More than double the number registered in the same month in the previous year (999 in March 2021), and
• 34% higher than the number registered three years previously (pre-pandemic; 1,582 in March 2019).

The report also states that `in March 2022 there were 1,844 Creditors’ Voluntary Liquidations (CVLs), more than double the number in March 2021 and 62% higher than March 2019.’

On the 28th March 2022 the Government has announced that the last of the Temporary Insolvency Restriction Protections are being lifted. 

To help protect businesses from insolvency a number of changes were introduced under the Corporate Insolvency and Governance Act (Coronavirus) to protect business from creditor action since June 2020. 

Most of these measures expired at the end of June and September 2021, except for restrictions on winding up companies, which were extended until 31 March 2022. This remaining insolvency restriction will not be extended further, allowing the insolvency regime to return to its pre-pandemic operation.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

The Government has announced (28 March 2022) that the last of the Temporary Insolvency Restriction Protections are being lifted. 

To help protect businesses from insolvency a number of changes were introduced under the Corporate Insolvency and Governance Act (Coronavirus) to protect business from creditor action since June 2020. 

Most of these measures expired at the end of June and September 2021, except for restrictions on winding up companies, which were extended until 31 March 2022.This remaining insolvency restriction will not be extended further, allowing the insolvency regime to return to its pre-pandemic operation.

Emma Miller, Top Service Company Director says:

“The Government is now advising business leaders to seek professional insolvency advice to help protect their business. We advise members to look at their options for collection, take advice from their collections service provider on the best course of action and consider all options.

We welcome the opportunity to talk to you about any bespoke changes you would like to make to our debt recovery procedures to fit the culture you have for maintaining customer relationships, whilst addressing the need to keep cash flow as fluid as possible for your business. Please contact our collections team to talk through any individual cases or to explore how else we can support you,” 

The temporary measures were introduced in the Corporate Insolvency and Governance Act 2020

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee debt recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

In an ideal world, the objective of a party entering into a contract is to ensure that their matter runs as smoothly as possible, with both parties involved hopeful that it will be completed on time and as agreed.

Having said that, even the most carefully laid out matters do not always go exactly as planned. 

For example, in a construction contract, additional unanticipated works may be required, or certain products installed may not work as expected and the likely scenario is that works take longer than foreseen. As a result, the project will usually have a higher unexpected cost, and this may lead to a claim by one of the parties if it cannot be resolved through early negotiations.

Common types of claims that may occur between parties could include: – 

• breach of contract
• non-payment
• claims for extensions of time, loss and expense
• variations
• defective works
• liquidated damages
• breach of a professional consultant’s duty of care

Tactics to settle your dispute 

When considering how to settle a dispute, the parties can resolve their differences by using various routes.

The more established and effective route for resolution of a dispute is through the courts. This procedure commonly involves a court process and is subject to court disbursements and legal fees. Whilst this can be an efficient and, in some cases, necessary option, there has been a significant growth in parties considering Alternative Dispute Resolutions (ADR) such as Without Prejudice Discussions, Mediation, Arbitration and Adjudication.

So, what are these routes and how does each differ from litigation?

1. Without Prejudice Discussions 

Without Prejudice Discussions can take place ‘pre-action’ or after litigation has been issued. This method is typically the most economical approach to parties seeking a solution to the issues in dispute. 

Usually, parties can have various discussions to narrow the issues and resolve the dispute by way of written correspondence, telephone calls or face to face meetings, with or without legal representation. 

In order for Without Prejudice Discussions to be beneficial, it is advised that parties approach these discussions not to ‘win’ or have the ‘upper hand’, but to seek to resolve matters with compromise and commerciality in mind. 

2. Mediation

Mediation is one of the most commonly recognised and used forms of alternative dispute resolution. 

Mediation involves an independent third party (the Mediator) who seeks to assist both sides in coming to an agreement to resolve their dispute. They will ascertain the concerns in dispute and explore the possibility of a settlement.  

Mediation is usually confined to a set period of time (from a couple of hours to a full day). It starts with each party presenting a summary of their case to the Mediator, in the presence of the other party. The parties then retire to separate rooms and the Mediator travels between them, seeking to identify issues where agreement may be reached. The Mediator cannot impose a settlement on the parties, but settlements are usually agreed by the end of the process.

In order for the Mediation to be effective, it is advisable to consider this approach when parties have sufficient knowledge about the merits of claim, especially in cases where the stakes are high. Therefore, it is most common to undertake Mediation while a claim has been issued and parties seek a stay in the proceedings to undergo Mediation to attempt settlement. 

3. Adjudication

Adjudication is a dispute resolution process which offers a speedy mechanism for parties to resolve disputes. It provides a temporarily binding decision which must be complied with until overturned or varied by a court or arbitration.

It is a statutory right introduced into UK construction contracts by the Housing Grants, Construction and Regeneration Act 1996.

The purpose of Adjudication is to resolve disputes swiftly, usually 28 days of its referral, during the course of the contract to minimise delay on the work and protect the cash flow. 

Adjudication is an effective form of dispute resolutions but is fairly unique to the construction industry and therefore cannot be applied to all cases. 

4. Arbitration

Arbitration is a contract-based dispute resolution determined by a private tribunal of the parties’ choosing. Arbitration is established on party agreement (the Arbitration Agreement) and regulated and enforced by national law and national courts. 

The result of an Arbitration is usually an Arbitral Award, which is a final, binding and enforceable decision on the dispute submitted for determination. The pros and cons of Arbitration are:

• pro: the ability to choose a suitable arbitrator with the relevant technical knowledge
• pro: the award is private and therefore confidential
• con: although arbitration can be quicker and cheaper than litigation, the reality is often the opposite
• con: arbitration is not always suitable where there is a multi-party dispute

While contracts usually set out the official method for alternative dispute resolution, direct negotiations and/or mediation is the most common choice of ADR. Parties should consider resolution meetings to resolve a dispute as a commercial decision. This can be done prior to issuing legal proceedings or in parallel. 

ADRtechniques can be cost effective, flexible and are confidential. In order for ADR to be fruitful, parties should consider the strengths and weaknesses of their case and their opponent’s case in order to conclude matters.

It is therefore important to seek assistance from a legal advisor to determine the legal and factual issues which may lead to settlement.

For further advice, please contact Marina Akram, Commercial Litigation Solicitor at Silverback Law on 0844 967 2700 or marina.akram@silverbacklaw.co.uk. 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (16 March 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in February 2022 was 1,515:

• More than double the number registered in the same month in the previous year (685 in February 2021), and
• 13% higher than the number registered two years previously (pre-pandemic; 1,346 in February 2020).

The report also states that in February 2022 there were 1,329 Creditors’ Voluntary Liquidations (CVLs), more than double the number in February 2021, and 40% higher than in February 2020. 

Temporary Insolvency Restriction Protections put in place to support businesses during the pandemic started to phase out from 1st October 2021. New targeted measures to support small business and commercial tenants will continue until March 2022 and include:

• Protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
• Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

Insider Intelligence is our construction industry specific information that provides up to date, relevant, reliable information to enable more informed business decisions to be made when accepting an application for a trade credit account.

When mainstream agencies look at credit information they number crunch. They use the last set of accounts and any public record information to produce credit limits and scores. It’s a pretty good way to look at credit information but it can overlook information that a person notices, for instance:

• What has happened from the time the business filed their last set of accounts to the time the credit check is performed?

A business has nine months from its financial year end to file its accounts. Then there is a whole year trading plus nine months that is unaccounted for until the next set of accounts is filed. 

That is where industry specific trading experiences come into play. It’s these trading experiences that tell a potential supplier how the data subject is paying other suppliers right now. Which, when a business is looking at whether they are willing to risk extending credit facilities to another business is what they need to know to make an informed decision. What is the likelihood that they are going to be paid on time, late or not without a lot of time, effort and cost or even at all. 

The people and ears to the ground element of insider intelligence is spotting those things that just don’t look right or when trading experiences change. It’s the information that a computer, algorithm or any amount of number crunching will miss. For example, the 16 year old Director that following investigation turns out to be the son of someone with a bankruptcy order, potentially acting as a shadow Director.  It’s the Director our helpdesk team remembers from another business that traded fraudulently 10 years ago that Companies House haven’t been able to link.

Maybe it’s from generally paying suppliers but exceeding terms, to accounts now remaining overdue. It’s that information that our helpdesk team spots which leads them to look a little more in depth into a data subject and potentially pick up on an unadvertised winding up petition. Or another TS customer who has filed a petition today. Or something the business has told our debt recovery team that doesn’t add up that starts some extra investigations. 

“When considering whether or not to extend credit facilities, having information to help you calculate whether to expect to be paid on time, late or struggle to collect payment is vital. 

We urge our members and the wider construction industry to protect their businesses by  actively monitoring trading experiences and acting upon early warning signs.  Don’t wait for the information to come to you, use an industry specific service that can spot changes in payment patterns resulting in regular, more in-depth and up to date checks being carried out to pick up information quickly.

If you already have a trading history with the business look at the orders that have previously been placed. Some companies will establish a good line of credit with suppliers, placing small, regular orders to give the appearance of a good customer. However, once an order pattern starts to change, ask questions to establish the reason for the change.

Top Service Ltd gives you access to this construction specific information. As well as information you would expect to see on a standard credit report,” Emma Miller Company Director, Top Service Ltd.

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences. Our insider intelligence can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

A winding-up petition is the first step towards obtaining a winding-up order against a business that has substantial unpaid debt.  If a winding-up order is subsequently made, it will enter compulsory liquidation, cease trading and the conduct of its directors will be investigated.

What does it mean if one of your customers has a Winding Up Petition issued against it?

If one of your customers has had a winding up petition issued against it, it is because one of its creditors has decided to commence proceedings to recover monies owed to them.

A winding up petition is usually a sign that the customer is not paying its debts as they fall due and is usually implemented as a last resort, having already tried to reclaim monies via a statutory demand or other enforcement action. As such, it is not advisable to permit the customer to extend its liability with you until the winding-up petition has been dealt with by the Court.  

If I am owed money by a customer, can I issue a Winding-Up Petition against it?

You can issue a winding-up petition against a corporate customer (“the Debtor”) if:

• at present, there is a debt due of £10,000 or more; 
• the debt is undisputed;
• the debt is not due under a business tenancy; and 
• you have given the Debtor 21 days’ notice inviting the Debtor to make proposals for payment of the debt and the Debtor has either failed to make any proposals or not made proposals for payment to your satisfaction.

What is the process?

Once the petition has been issued, it will be sealed by the Court and listed for a hearing date, usually around 6 weeks’ time.  

Before the hearing of the petition, it has to be served on the Debtor.  It is advisable to use a process server to do this to ensure that service has taken place correctly.

Seven days after the sealed petition has been served on the Debtor it can be advertised in the London Gazette.  This allows other creditors of the Debtor to see the petition and gives them the opportunity of supporting it. 

Once a petition has been advertised, the Debtor’s bank will usually freeze its accounts.

If a winding-up order is made by the Court at the hearing of the petition the Debtor will be deemed to be in liquidation, the business of the Debtor will be automatically closed, the Official Receiver will be appointed as its liquidator and the Debtor’s assets will be realised.  Any realisations will be paid proportionally to the Debtor’s unsecured creditors, after the costs of the petition, the liquidator, the liquidation process and possibly the secured creditors have been paid.

What if another creditor has already presented a winding-up petition against the Debtor?

There should only be one winding-up petition issued against the Debtor at any time.  However, any creditor of the Debtor can support an existing winding-up petition and, if for any reason the petitioning creditor decides not to proceed with the petition, any other creditor or group of creditors who could have presented a petition can, with the Court’s approval, take over control of the issued petition.

If you require advice please contact Alison Beard, Head of Insolvency, Silverback Law, on 0844 967 2700 or alison.beard@silverbacklaw.co.uk.  

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

National Insolvency figures published (15 Jan 2022) by the Government’s Insolvency Service have indicated that the number of registered company insolvencies in January 2022 was 1,560:

• More than double the number registered in the same month in the previous year (758 in January 2021), and
• Similar to the number registered two years previously (pre-pandemic; 1,508 in January 2020).

In January 2022 the report confirms there were ‘1,358 Creditors’ Voluntary Liquidations (CVLs), more than double the number in January 2021, and 34% higher than in January 2020. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were more than twice as many compulsory liquidations as in January 2021.’ https://www.gov.uk/government/statistics/monthly-insolvency-statistics-january-2022/commentary-monthly-insolvency-statistics-january-2022

Temporary Insolvency Restriction Protections put in place to support businesses during the pandemic started to phase out from 1st October 2021. New targeted measures to support small business and commercial tenants will continue until March 2022 and include:

• Protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
• Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.

Post Insolvency Debt Collection Service

We provide Insolvency Practitioners with a tailored end to end Post-Insolvency Debt Collection Service. We provide our service in collaboration with Silverback Commercial Law who offer competitive rates if legal action is required to recover monies owed. 

What we offer

• Free of Charge Ledger Consultation
• Collections Process with online access to live information on all cases
• Retention & Contract Collections
• Legal Action to Recover monies owed
• Dispute resolution

What makes us different?

• Our bespoke collection strategies mean that no case is treated the same. Our access to credit information and exclusive trading experiences enables us to change strategy quickly when our incoming intelligence is received, providing excellent results.
• Fast, effective collections. We know that speed is of the essence, so all collections are given top priority.  We don’t just go through the motions, our experienced and highly skilled team members are adept at tricky negotiations, dispute resolution, tracing absconded debtors and thinking outside of the box to achieve tangible results.
• Fully compliant.  We have been trading for 30 years and we have always taken compliance very seriously.  We are authorised by the FCA and Top Service Ltd is a corporate member of the Credit Services Association (CSA).  All senior Top Service staff are members of the Chartered Institute of Credit Management and collections professionals are hand-picked and trained to the highest standards. 
• We have more than 30 years of experience in collecting commercial and contract debts.

To discuss our Post Insolvency Collections Service with a member of our expert team please email insolvencycollections@top-service.co.uk.

Are you struggling to recover the money you are owed?

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.

A phoenix operation is when a company is liquidated and the directors simply buy its assets cheaply, set up a new company, and continue to trade with the same or a similar name. Hiding previous failures from the public, it lets them leave creditors with nothing. As phoenix operations rise from the flames, it’s often their creditors that get burnt. 

Is this legal?

Phoenix companies can be legal, but there are strict regulations to comply with, specifically, Section 216 of the Insolvency Act 1986.  If this is not adhered to, those involved in the management of the phoenix company may be subject to criminal and/or civil sanctions and liabilities.

What does the law say?

When a company is placed into insolvent liquidation, Section 216 prohibits its directors from ‘involvement’ in another company with the same or similar name for five years, from the day insolvent liquidation begins. This may include existing companies/trading entities, including those that have been recently incorporated and/or commenced.  The law is designed to prevent directors hiding their old company’s failure from the public. Although they can legitimately buy old company assets, they must make it clear the new business is separate from the old one.

What is involvement and what’s a prohibited name? 

A person is considered to be involved in a phoenix company if they are: a director of a company known by a prohibited name; in any way contributing to the formation, promotion, or management of such a company, or in the carrying on of a business with a prohibited name. 

A prohibited name is one the insolvent company was known by at any time in the 12 months before it was placed into insolvent liquidation, or one so similar it suggests an association. This also applies to a company’s trading names and/or abbreviations associated with it. 

There are three statutory exceptions when an individual will not be deemed to have breached Section 216, which are:

• When (before a breach has occurred) directors who have been involved in the insolvent company give notice to its creditors that they are, or are to be, involved in a company that is acquiring the whole or substantially the whole of the insolvent company’s business from the liquidator (or administrator).
• When the directors make a successful application to court for permission to be involved in an entity using the prohibited name; or
• when the company with the prohibited name has been operating (and not dormant) for at least 12 months prior to the insolvent company going into liquidation.

Before any of these exceptions are relied on, it’s strongly advised that those involved ensure they receive legal advice. 

If a person acts in breach of Section 216, they may be subject to criminal and/or civil sanctions.

• Under criminal law, the individual is liable to imprisonment or a fine, or both if convicted.
• Under civil law the individual could be prosecuted for disqualification as a company director.
• Under civil law the individual is automatically jointly and severally liable with the new company and anyone else acting in breach of Section 216, for its ‘relevant debts’, even if it is a limited company or partnership. What constitutes ‘relevant debts’ will be fact dependant, but they will be those debts and liabilities incurred by the new company, while it’s known by the prohibited name.

Accordingly, a creditor of a new company using a prohibited name can bring a civil action directly against those individuals involved in its management.  They don’t need to pursue the company itself, although, if it is not in an insolvency process, it may be worth bringing an action against multiple defendants.

Phoenix companies can offer a solution for directors and creditors of failing companies. However, they’re often administered incorrectly, leaving creditors aggrieved, and individuals unaware of the personal liability they may be exposed to. If you are a creditor of what you believe is a phoenix company, particularly one that has subsequently been placed into an insolvency process, you may wish to seek advice on the options available to you and the potential parties that you can pursue for the recovery your debt.

If you require advice in relation to Section 216 of the Insolvency Act 1986, as a creditor or director of a phoenix company, please contact Alison Beard, Head of Insolvency, Silverback Law, on 0844 967 2700 or alison.beard@silverbacklaw.co.uk.  

“At Top Service Ltd as well as monitoring companies, members have the ability to monitor individual company directors.  Our director monitoring service will inform you if a director is appointed at another company or if they resign any of their directorships.

Keeping track of the individuals behind a company is often as important as monitoring the company itself.  As well as providing you with an up-to-date picture of a person’s business interests it may also alert you to potential ‘phoenix companies’. A ‘phoenix company’ is one which rises from the ashes of an insolvent company, and it usually :

• Has a similar name to the failed company.
• Carried out the same trade as the failed company.
• Trades from the same address as the failed company.
• Has the same directors as the failed company.

A phoenix company will typically be set up before the original company goes under. This is a common occurrence in the construction sector and is not illegal unless it can be proven that the directors deliberately defrauded creditors.” Emma Miller, Company Director Top Service Ltd 

What makes Top Service Ltd different? 

As the only credit reference and debt recovery agency specific to the construction industry, we make it our mission to ensure our members receive the most up to date, credit information and company trading experiences which can make a real difference between company profit and painful write-offs. 

Are you struggling to recover the money you are owed?

Top Service members have access to an exclusive combination of no collection, no fee recovery services.

Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.