Brexit and the insolvency sector

There has been much doom and gloom around in the news since the result of the EU Referendum was released and it would appear that many feel that the insolvency sector must be expecting an avalanche of work as a consequence of the Brexit vote. Difficulties are predicted arising from the ongoing uncertainty amongst many other factors but only time will tell what impact the decision will have on individuals and businesses in the immediate and long term future.
 
It has not taken long for warnings to be issued and The Bank of England Governor, Mark Carney, this week advised “there is evidence that some risks have begun to crystallise. The current outlook for UK financial stability is challenging”. On a positive note, The Bank of England has eased the capital requirements for banks and several major banks have committed to making extra capital available to assist individuals and businesses alike. Other positive news is that the financial markets have remained stable and the fall in the value of the pound had assisted many businesses that trade overseas.
 
More worryingly are the reports from the Financial Policy Committee of “the high level of UK household indebtedness (and) the vulnerability to higher unemployment and borrowing costs” for households. It is also general knowledge that foreign investment has dropped significantly which in turn will impact upon the commercial property sector and the construction industry. The knock on effect will be felt by many involved in these areas. The drop in the value of the pound will also not be good news for all businesses especially those importing goods who will find their profit margins squeezed as their purchasing costs increase. This is in addition to the usual challenges for businesses such as the pressure of dealing with issues such as a bad debt, creditor pressure, cashflow problems and the loss of key customers.
 
R3, the trade body of Insolvency Professionals and Insolvency Practitioners, reported in advance of the EU Referendum that aside from the Brexit vote there were many other concerns for business owners including the introduction of quarterly reporting, the introduction of the National Living Wage, the digitalisation of tax reporting, the introduction of Universal Credit and the introduction of the Apprenticeship Levy. Clearly there are many challenges for businesses aside from the repercussions of the Brexit vote.
 
It is clear that we are entering a prolonged period of uncertainty and during these times it is important that individuals and business owners seek advice at the earliest opportunity in order to overcome the financial difficulties and challenges they encounter. Aside from specialising in all forms of personal and corporate insolvency procedures, Turpin Barker Armstrong offer an advisory service so that we are able to work with clients in order to achieve resolutions with the purpose of avoiding formal insolvency proceedings being instigated. This includes negotiations with creditors and seeking a consensual route forward that is inevitably the best course of action for all stakeholders.
 
We are always happy to provide a free no obligation initial consultation so that advice is sought without delay.