Taxi Company Closure and Rescue Options
With changes in legislation, fluctuating fuel prices, and competition from app-based ride services, your taxi company could face financial challenges. If your taxi firm cannot repay its debts when they fall due, speaking to us can help you find the right solution for your company. We can provide free, impartial, confidential advice with no obligation, and explore your potential options to recover or close your company.
In this guide, we will outline some practical insolvency advice tailored to taxi companies, allowing you to make informed decisions about the future of your company, whether that involves repaying, restructuring, refinancing, or closing down.
Common financial challenges for taxi companies
We can advise on financial challenges specific to what your taxi firm could face, including but not limited to:
- Rise in online and app-based competition
With the rise in the use of ridesharing apps and services, traditional taxi companies or minicab operators can find it hard to compete, leading to a potential loss of revenue. Speak to us if extra pressures from competition have impacted your company’s takings. We can discuss the options available to alleviate the problem. - Changing regulations
A 2023 ruling by the UK’s Supreme Court altered taxi companies’ tax obligations. Further changes to legislation or regulations around taxi licensing, insurance, or extra qualifications for drivers could push a previously profitable taxi company into debt if it can’t afford the additional investment. If a change in regulations has led to financial challenges for your company, speak to us for tailored advice. - Fluctuating fuel prices and other operating costs
Increases in fuel prices, insurance, licensing premiums, vehicle maintenance, or the expense of replacing outdated vehicles can add significant strain on a taxi company’s finances. We can assess your company’s situation and find the best solution for its circumstances, which could involve repaying in affordable instalments, or restructuring the company. - Difficulty recruiting or retaining drivers
The industry’s highly competitive nature and the sometimes-infrequent consistency of taxi driving can make it difficult for taxi companies to attract new drivers or retain existing ones. We can offer advice tailored to your company’s circumstances and detail the appropriate rescue, recovery, or closure options if it is struggling. - Bounce Back Loans (BBL)
The government initiative of bounce back loans were 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 your BBL and how it would be treated in various insolvency options.
How we can help rescue your taxi company
Below are two formal insolvency procedures that would allow your taxi firm 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 formal repayment plan between a company and its creditors that would enable you to repay your unsecured debts in instalments, tailored to what the company can afford monthly. The procedure means your taxi firm could continue trading and to retain all your company’s goodwill and reputation with customers, whilst being protected from any creditor legal action, who are in the payment plan. CVAs typically last for up to five years and once concluded any remaining unsecured debt is written off.
More on a Company Voluntary Arrangement - Restructuring your taxi firm through administration
Administration is an insolvency procedure for companies that are insolvent. Entering the procedure, your taxi company will be in a temporary state of protection by a moratorium. This halts creditor action, including legal proceedings and gives your company the breathing space to continue trading. We will act as administrator and our primary purpose is to rescue your company as a going concern, attempting to restructure and turn it into a leaner more profitable organisation. If rescuing the company isn’t a viable option we will also look at the most appropriate exit strategies from administration, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
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How we can help close and liquidate your taxi company
If your taxi company is insolvent and creditor pressure has reached a level where the business cannot continue trading, liquidating the company would draw a line under its operations and write off its unsecured debts.
- Close your taxi company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency process designed for companies that are insolvent and have unmanageable levels of debt. The process would close your taxi firm, ceasing the businesses operations, realising the company’s assets and removing creditor legal action. If eligible, employees and directors will be able to 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. Once the process is complete, any remaining unsecured debts will be written off and the company will be dissolved.
More on a Creditors Voluntary Liquidation - Close your taxi 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 pre-purchases the assets of an existing company that is then liquidated. This allows you to close your taxi firm while continuing its business under a new company without any unsecured historical debts. You will be able transfer key assets, contracts and arrangements, as well as your employees to the new company under TUPE regulations, ensuring their continued employment. In some cases, you may be able to 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 taxi companies
If the company has an otherwise healthy cash flow but a large, upcoming payment risks pushing it into the red, commercial finance could be a viable solution. There is a range of potential finance options available that can help cover a one-off expense or a gap in the company’s incoming payments. Speak to us for a more detailed breakdown of which commercial finance options best fit your taxi company.
More on commercial financeHow to get in touch with us: The next steps
If your taxi company is facing financial challenges, it’s important to understand the different closure and recovery options available. 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 taxi firm’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
Make contact with our team, via phone, filling in a form, or online chat. We will assess your circumstances and, if suitable, arrange a free consultation with a consultant to discuss your company’s situation. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or whether alternative solutions better suit your company’s problems. - Formally engage with Wilson Field
If there is an appropriate insolvency solution, we will confirm the necessary steps to start the procedure and will issue you with the relevant documentation for you to formally engage us.
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