Can you help me?

[bridge too far]

I need some advice:

 

1. If a company is unable to pay its staff wages, is it technically insolvent?

 

2. If a company is unable to pay bills but has issued invoices still to be settled, is it technically insolvent?

 

3. Is there any way that an employee can find out from HMRC if his / her income tax contributions have actually been paid by the employer?

 

This is nothing to do with Saints BTW - just a gap in my knowledge that needs filling.

 

All help gratefully received.

[Jillyanne]

Pm dsm.

[Post-it note]

pmsl

[stevegrant]

1. Technically, yes.

2. Technically, no.

3. Don't see why not, although they might not have entirely up-to-the-minute information available.

[Saint Keith]

1. not neccesarily. but it does have a duty of care

 

2. no. but it does depend on whether the amount of those invoices and the amount of free cash it has is more than is oustanding in bills etc, (and whether it can reasonably expect to trade out if it would be factored in as well, but that doesnt answer the "technical" question)

 

3. very difficult

Edited 17 June, 2009 by Saint Keith

[Rattlehead]

I need some advice:

 

1. If a company is unable to pay its staff wages, is it technically insolvent?

 

2. If a company is unable to pay bills but has issued invoices still to be settled, is it technically insolvent?

 

http://www.lmgtfy.com/?q=definition+technically+insolvent

 

3. Is there any way that an employee can find out from HMRC if his / her income tax contributions have actually been paid by the employer?

 

http://www.lmgtfy.com/?q=contact+HMRC

[Rattlehead]

All help gratefully received.

 

Apparently not.

[bridge too far]

Apparently not.

 

I generally have you on 'ignore' so I missed your posts. Two consecutive posts tweaked my curiosity.

 

So thanks for your advice - I'll have a good look at the links.

 

[Clapham Saint]

I need some advice:

 

1. If a company is unable to pay its staff wages, is it technically insolvent?

 

2. If a company is unable to pay bills but has issued invoices still to be settled, is it technically insolvent?

 

3. Is there any way that an employee can find out from HMRC if his / her income tax contributions have actually been paid by the employer?

 

This is nothing to do with Saints BTW - just a gap in my knowledge that needs filling.

 

All help gratefully received.

 

According to section 123 of the Insolvency act there are 2 key tests

 

1) If the value of the Company's assets is less than that of it's liabilities (including prospective and contingent liabilities)

 

2) If the company is unable to pay its debts as and when they fall due. This is normally "proved" by an outstanding statutory demand which remains unsatisfied for over 21 days.

 

 

In practice not of the above prove that the company is "technically insolvent". Many companies experience short term cash flow difficulties before recovering... however not being able to pay wages is never a good sign. Especially if the company in question is one where the key value is the employees (e.g. a recruitment agent which doesn't own much in the way of physical assets).

 

Most companies unable to pay wages in the short term will ask the bank for some extra cash to get them through. If the bank says no then it doesn't look good I'm afraid.

 

Obviously this is a generalisation and there may be other factors in this case.

 

I'm on holiday at the moment so not logging on often but if you have anything more specific let me know and I'll reply if I can.

 

CS

[Amesbury Saint]

I need some advice:

 

1. If a company is unable to pay its staff wages, is it technically insolvent?

 

2. If a company is unable to pay bills but has issued invoices still to be settled, is it technically insolvent?

 

3. Is there any way that an employee can find out from HMRC if his / her income tax contributions have actually been paid by the employer?

 

This is nothing to do with Saints BTW - just a gap in my knowledge that needs filling.

 

All help gratefully received.

 

1. No, just breach of contract. (although could lead to insolvency)

 

2. No. short term cash flow problems (although could lead to insolvency)

 

3. Ring up HMRC and see what they have to say. You could use Freedom of Information enquiry approach.