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Insights

Following upon the devastating impact of Covid-19 in recent weeks, the UK Government together with the Financial Conduct Authority and UK Finance (the body representing the majority of Lenders) have put in place a number of measures to help during these unprecedented times.

Banks, Building Societies and Lending Institutions are re-assessing their mortgage products and in particular, the level of risk involved.

What a difference a day makes

Prior to 2003 debts due to HMRC ranked above other creditors in insolvency proceedings. This is known as the Crown Preference.  The purpose of the Crown Preference is that it introduces a preferential claim in insolvency procedure which means that HMRC is paid prior to floating charge holders. The only other preferential claims in insolvency are claims of employees for things such as unpaid wages.

The UK Government issued updated guidance on the Coronavirus Job Retention Scheme on Saturday and this has clarified the position on the ability of executive directors (that is, directors who are paid a salary) to be placed on furlough. Importantly, this includes salaried individuals who are directors of their own personal service companies.  

The current Coronavirus outbreak is undoubtedly having an effect on each and every one of us, both in the context of our working lives and our family lives.

Last week the Government issued guidance as to what we all should and shouldn’t be doing to keep both ourselves and our families’ safe during this outbreak.  Many parents are trying to work out suitable arrangements for what is right and in the best interests of their children with the likes of home schooling one of the many considerations.  Additionally for separated parents, where their children were ordinarily moving between two households, whether by agreement or court ordered arrangement, one question for them will be how such contact between a child and the other parent can operate safely in the current circumstances.

These are challenging times and the raft of support measures introduced by the government are very welcome.  There are other measures that can help protect your business.  Caveats act as an early-warning system in the event that certain types of action are raised at Court in Scotland against your business without your knowledge.  They should therefore be considered as an integral tool of any business risk management strategy.

Time to review credit control

Almost on a daily basis new measures are being introduced by the Government and other bodies to support business whilst the fight to slow the spread of COVID-19 continues. Calls are being made upon the First Minister Nicola Sturgeon to clarify how these measures will work in practice, but what is clear is the devastating impact this already has on business cash flows throughout the UK.

Until this support arrives in real hard cash, what can be done to ensure employees and suppliers are paid at the end of this month and months to come? This is the time to review credit control procedures and book debt.

Looking to the future - digital assets

Kirsten Anderson, Senior Associate in our Private Client team, is featured in the March edition of the Business Bulletin - published by Aberdeen & Grampian Chamber of Commerce. 

The high cost of paying for your payments - Solved?

Dispute Resolution partner, Robert McDiarmid, is featured in February's edition of the Business Bulletin - published by Aberdeen & Grampian Chamber of Commerce. 

Chambers Leading Firm 2020 bw

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