IT Consultancy Case Study
This business was set up by its director as a specialist provider of IT consultancy services aimed at the retail and finance sectors.
The director was highly knowledgeable and had previously held a senior role, before leaving to take some time off and go travelling. On his return, he chose to become a contractor and established himself as a limited company. This was often well paid work and he earned around £400 to £500 a day for contracts, which typically lasted between three and six months. He worked either in the client’s premises or from home, so did see it as worthwhile to rent his own business space. Using home as his business address was accepted by the client.
The director never set up an overdraft facility from the company’s bank and he relied on his earnings for cashflow.
In the early stages, work went well, with the director being booked constantly. However, problems set in when his marriage broke down and a separation was followed by legal proceedings. The director found it hard to focus on work matters and he failed to ensure his company was compliant in completing and submitting statutory forms to HMRC.
Eventually, he was ready to return to work, but because he did not file his company’s annual return or accounts, the business was struck off the register. Although the company had funds in its bank account, there were also large HMRC liabilities and these could have rendered the business insolvent.
The director realised he needed to close the business in an orderly fashion and contacted Company Debt. With our assistance, his company was restored to the register and placed into Creditors’ Voluntary Liquidation.