Plumbing Contractor Company Closure and Rescue Options
While plumbers seem to be in constant demand, the realities of working in the sector, paying high overheads and labour costs while dealing with clients potentially not paying on time, and complying with regulations and tax requirements can create an unsustainable situation for would-be contractors. Speak to us if your plumbing contractor company is experiencing financial challenges, and we will provide you with tailored, regulated insolvency advice free of obligation.
In this guide, we will help you navigate the complexities of insolvency in a plumber contractor company and offer practical, tailored advice. With the right knowledge, you can make a well-informed decision on your company’s future, whether that involves repaying in instalments, refinancing, restructuring the company, or closing it down.
Common financial challenges for plumbing contractors
We can help advise on financial issues that could threaten your plumping contractor company, including but not limited to:
- Compliance and tax issues
Plumbers must comply with strict industry standards to maintain the licenses needed to carry out their work and maintain and declare their taxes to HMRC. Failing to comply with these can lead to sizable fines and arrears. Speak to us if one or several fines have pushed your plumbing contractor company into financial difficulty, we can assess whether repaying debts in affordable amounts would be possible or if alternative action is required. - Unaffordable overheads
The cost of labour, raw materials, tools, and maintaining those assets and personnel to avoid issues such as breakdowns, shortages, or pay disputes can be an expensive necessity. If you’re struggling to pay staff or subcontractors, get in touch with us to discuss your options. - Delayed payments for work
Any delay in receiving payment for work can hurt your company’s finances, especially if the work has already been completed and you’ve spent money on materials and labour. We can advise you on the best commercial finance options to help you fill the gap, or alternative recovery options to help manage the effects of clients who aren’t paying on time. - Bounce Back Loans (BBL)
The government’s Bounce Back Loan initiative was very important during the pandemic. However, companies are now having trouble repaying them. We can give you advice on what options you have when it comes to repaying the loan and how a BBL would be treated in various insolvency options.
How we can help rescue your plumbing contractor company
Two formal insolvency procedures are listed below that allow your plumbing contractor company to continue trading while protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a structured, formal payment plan with your company’s creditors that allows your limited company to manage its unsecured debts through affordable monthly repayments. Lasting up to five years, any of your company’s unsecured debts which remain upon its completion are written off. By placing your company into a CVA, you’re ensuring protection against creditors in the plan, and the opportunity to continue trading while slowly reducing the debt level, maintaining the company’s brand presence and preserving its reputation.
More on a Company Voluntary Arrangement - Restructure your company through administration
Placing your plumbing contractor company into administration, will provide temporary protection from legal action, from a moratorium, enabling your business to continue trading. We will act as administrator and aim to rescue your company as a going concern. This may involve restructuring the business, streamlining operations, making staffing changes, or finding new investment. We will also consider potential exit strategies from the procedure, which could involve a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your plumbing contractor company
Winding down your plumbing contractor company’s operations through liquidation would draw a line under its operations. The company will be dissolved, writing off its unsecured debts.
- Close your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal closure procedure designed for insolvent companies. The process would close your plumbing contractor company in an orderly, legally compliant manner, with trading operations ceasing. The process will see your company’s assets realised, with outgoing payment agreements such as loans and leases terminated, and once completed, the company’s unsecured debts and arrears will be written off. If eligible, employees and directors can apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
More on a Creditors Voluntary Liquidation - Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is an informal term for a type of liquidation where one company agrees to the pre-purchase of the assets of an existing company, which is then liquidated. This procedure would enable your business to continue trading in a new limited company without any historical unsecured debt, causing minimal disruption to the business’s brand, customer base and operational activity. The new limited company can also retain key assets such as leases, equipment, as well as the potential transfer of employees under TUPE regulations. In some cases, you may reuse your company’s trading name, but this can be complex. We can advise you on these processes and how it works.
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Commercial finance for plumbing contractors
If your company has steady cash flow but is at risk of being impacted by a significant upcoming payment, commercial finance could provide the support you need. There are several financing options that can help you manage one-time expenses or cover shortfalls in revenue. Contact us to explore the best commercial finance solutions tailored to your company’s situation.
More on commercial financeHow to get in touch with us: The next steps
If your plumbing contractor company is struggling with one or multiple financial challenges, it’s important to understand your options to close or rescue the company. Our initial advisers will offer a comprehensive explanation of the different options available to you and our experienced consultants will look at tailoring our processes to your company’s circumstances.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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