Welcome to our general questions and answers section. We hope you find them helpful and informative. Please let us know if you encounter any problems or have suggestions. If you don't find the answer to your question below, please contact us.
- Who are Crown Strategies?
- Who is the Crown?
- What forms of taxes can Crown Strategies assist me with?
- Why has the Crown identified me/my business in particular?
- How many businesses have you helped in the past?
- Is such an agreement suitable for my business?
- How much does it cost?
- Do I have to pay upfront?
- What is the timescale?
- What makes Crown Strategies better placed to get an agreement?
- What is involved in the process?
- What is the longest agreement you have secured with the Crown departments?
- Which industries and geographical areas do you cover?
- What is a viability report?
- The content of the reports seem very detailed – why does it need to be so?
- Who will you be representing – me or the Crown?
- Will details of my business be kept confidential?
- How quickly can you come and see me?
- What will happen at the first meeting?
- What happens if you conclude my business is not viable?
- Why can’t I or my accountant get the same results?
- What will happen if I ignore the warning letters from the Crown or have a history of receiving them?
- What if I have a history of failed agreements?
- What if I already have a CCJ or have a bailiff at my door?
- What if the Crown has not noticed that I am in arrears – why should I tell them?
- What happens once I get an agreement?
- Why will the Crown sometimes request my business to be monitored even after I have an agreement?
- What happens I fail to keep to an agreement?
- What if I have other questions not on these FAQs?
Q: Who are Crown Strategies?
A: Crown Strategies is the specialist division within a firm of independent turnaround consultants, Corporate Strategies, who are also part of the DTE business advisory group. Crown Strategies are experts in negotiating agreements with the Crown departments.
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Q: Who is the Crown?
A: The Crown is HM Revenue & Customs and any other collector of taxes.
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Q: What forms of taxes can Crown Strategies assist me with?
A: To date Crown Strategies have assisted businesses and individuals with arrears in VAT, PAYE and NIC, Corporation Tax, self assessment tax and landfill tax.
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Q: Why has the Crown identified me/my business in particular?
A: The Crown performs an essential duty in collecting taxes on behalf of the Government and Treasury. The responsibility for remitting due taxes to the appropriate department is placed on businesses and individuals and as the Crown are unable to collect tax at source, demands, warnings, penalties, bailiff-actions and ultimately winding-up petitions are the only tools available to the Crown.
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Q: How many businesses have you helped in the past?
A: To date, we have assisted more than 350 companies to secure agreements with the Crown.
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Q: Is such an agreement suitable for my business?
A: Viable businesses encountering difficulties as a result of a short term problem can get into an arrears situation with HM Revenue & Customs. If you are struggling to make the next payment, be it PAYE or VAT, then you should be able to get an agreement.
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Q: How much does it cost?
A: Fees are charged on a case by case basis and vary depending on financial information available and complexity of the business. A typical range is between £3,000 and £12,000.
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Q: Do I have to pay upfront?
A: We would typically ask for an up front commitment fee to cover initial costs, but then agree a fee and payment structure with you at the outset of all assignments.
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Q: What is the timescale?
A: Typically, upon agreement of our fees and upon receipt of a letter of engagement, we will contact the Crown and agree a reporting timetable of between 2 and 3 weeks. During this time we request that no recovery action commences or gets actioned during this "moratorium" period. The Crown will typically take another 2 weeks to consider our proposals and/or request further information after which our negotiations can begin in earnest. The time from our initial contact with the Crown to an agreement date can take between 4 and 6 weeks.
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Q: What makes Crown Strategies better placed to get an agreement?
A: Crown Strategies assisted the DTI in the co-ordination of its sponsored Company Rescue Project pilot between 2001 and 2003 in the North West of England. During this pilot, Crown Strategies with the assistance of two dedicated teams at H M Inland Revenue and H M Customs and Excise agreed a reporting format and timetable, which we have continued with even after the pilot scheme ended. The scheme proved to be highly successful and the DTI is currently considering how this scheme can be rolled out on a national basis. Because of our history with the Crown and experience gained in our prior cases, we know how to negotiate with the Crown and how best to formulate a repayment plan that will suit the nuances of your business.
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Q: What is involved in the process?
A: After agreeing a reporting timetable with the Crown, we will perform a fairly detailed diagnostic on your business which will include reviewing previous financial information, discussing the current financial position of your business and examining your forward strategies. In particular, we will assist you with the preparation of detailed profit and loss, cashflow and balance sheet projections which we will use to formulate what the business can or cannot afford to repay. This latter exercise is a critical part of the review and allows us to tailor a set of proposals which reflect seasonal factors. These can include reduced payments during your quieter spells or perhaps larger payments to be linked in with key events such as a key forward contract of the refinancing of certain plant and equipment.
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Q: What is the longest agreement you have secured with the Crown departments?
A: We have secured agreements of over five years for some clients, when it was in their best interests to do so. However, we look carefully at the individual circumstances of each case to ensure the best possible outcome and will not submit any proposals to the Crown without first discussing the proposal and its implications with you. As a guide, the average length of all of the agreements we have secured to date would fall between 3 months and 18 months.
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Q: Which industries and geographical areas do you cover?
A: We have dealt with most industries during the past couple of years and there are no sectors that would be prohibited from the benefit of our assistance. We have offices in London, Birmingham and Manchester and, as such, are able to help businesses nationwide.
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Q: What is a viability report?
A: The viability report is designed to provide the Crown with a comprehensive insight into the issues of a business on both positive and negative. We include a brief description of the business’s activities, reasons for the short-term trading problems and details of the prospects of the business going forward. This is backed up with projections, cashflow and current/historical accounts. In most cases, the company’s accountant assists in preparing the financial element of the report.
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Q: The content of the reports seem very detailed – why does it need to be so?
A: It is important to provide the Crown with sufficient information to fully understand the history and causes of the current difficulties. It is even more important to inform them of what changes have been made to address the situation in order to ensure that they do not arise again in the future. Any proposals made in the absence of this information will have a low likelihood of success as they will not demonstrate the future viability of the business.
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Q: Who will you be representing – me or the Crown?
A: In every case, Crown Strategies are engaged by the company and act on their behalf. It is our job to reach an agreement with the Crown to re-schedule tax arrears over a timescale that fits with the (company’s) future trading forecasts.
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Q: Will details of my business be kept confidential?
A: Completely. Every step of the negotiating process is kept confidential between Crown Strategies, the company and the relevant Crown department. However, upon formal agreement of the company, the company may consider it beneficial to inform other parties (such as the company’s bankers) of the process.
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Q: How quickly can you come and see me?
A: We can be with you within 24 hours, if required.
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Q: What will happen at the first meeting?
A: UsuallyLes Gordon or Stephen Fern, directors at Crown Strategies, will attend an initial meeting to discuss the merits of putting a repayment proposal to the Crown. There are absolutely no obligations to enlist the services of Crown Strategies and, indeed, it may not be appropriate or necessary to do so. We are always happy to have an initial discussion and there are never any cost implications.
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Q: What happens if you conclude my business is not viable?
A: Unfortunately, not every business can overcome all of its shortcomings and/or difficulties. We do not propose deals to the Crown which we feel have little or no chance of success, so if we are in agreement that your business is no longer viable, we can give you advice about what to do next. We will, of course discuss our findings with you as soon as possible and will not notify the Crown departments until we are in full agreement.
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Q: Why can’t I or my accountant get the same results?
A: Generally, direct proposals from directors or their own financial advisors have a lower chance of success due to a perceived lack of objective clarity. We at Crown Strategies pride ourselves on our reputation and track record, which is second to none and this is reflected in our success rate with our proposals to the Crown.
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Q: What will happen if I ignore the warning letters from the Crown or have a history of receiving them?
A: Ignoring warning letters from the Crown is the worse thing you can do as they tend to represent the start of their recovery actions which ultimately may end in your business being wound up. If you have received one or more of these letters then your business needs help as soon as possible and you need to act before it’s too late.
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Q: What if I have a history of failed agreements?
A: A history of failed agreements is a symptom of a more fundamental problem with your business beyond that of a short term trading "blip". A new agreement with the Crown may still be possible; however, more importantly you need to be certain that your business is viable. Corporate Strategies, our parent company, can provide a complete turnaround service which may include refinancing assets and providing interim and long term high level managerial and operational support.
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Q: What if I already have a CCJ or have a bailiff at my door?
A: These circumstances signify that your business is further along in the Crown’s recovery process and typically only occur if you have not adequately responded to prior warning letters. Immediate action is required here to prevent your business from being wound up. An agreement is still possible and, in fact, a significant proportion of our prior agreements have been secured at this stage, however, a shorter reporting timeframe can be expected here and negotiations are sometimes conducted with third party agents on behalf of the Crown who may or may not be less sympathetic to your situation.
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Q: What if the Crown has not noticed that I am in arrears – why should I tell them?
A: If the Crown has not yet identified that you are in arrears then it is in your best interests to be proactive and tell them as quickly as possible. Approach them with your plan sooner rather than later and if you are confident that your business has long term viability then problems can be effectively solved. If you knowingly do not notify the Crown of your arrears then you’ll probably find them less sympathetic to your cause once they have been alerted.
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Q: What happens once I get an agreement?
A: Basically you can start running your business more effectively without the fear of being wound up by the Crown. However, it is worth noting that reaching such an agreement is not necessarily a solution to your trading difficulties in itself but rather provides you with some breathing space to address the actual issues. These may include one or more of the following:
- Loss of a significant customer
- Failure of a key supplier
- Sudden departure of a key member of staff
- Production inefficiencies or delays
- Loss of confidence by the bank
- Significant one-off event such as a fire, theft or bad debt
- A sector suffering from global competition
- Underinvestment in the business
In many of our previous cases, we have continued to help after the securing of a Crown agreement by assisting businesses to address some or all of the above difficulties.
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Q: Why will the Crown sometimes request my business to be monitored even after I have an agreement?
A: The Crown obviously wants to collect its debts as soon as possible. If you enter into an agreement which is longer than, say, 6 months, then the Crown may want to reserve the right to collect in the debts more quickly if your business performs better than expected. Also many proposals are linked into a key event in the future, such as securing a new and improved overdraft or factoring facility or the refinancing of certain fixed assets, at which point the Crown will rightly expect a reduction in their debts since they are not a substitute for commercial finance.
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Q: What happens I fail to keep to an agreement?
A: If you do nothing, you run the risk of having your business wound up. As always, it is better to be proactive, as the Crown will respect your honesty and foresight. A revised agreement may be necessary which we can assist you with, however, you will need to be clear as to why the previous arrangement failed, as this may have serious implications on the viability of the business.
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Q: What if I have other questions not on these FAQs?
A: Call either Les Gordon or Stephen Fern as soon as possible on 0161 835 1900 and we will be happy to chat through your situation.
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