Can anyone assist with CVA. My company went into a CVA in July last year. We did not know at the time, but they were entitled to take our Tax refund ( we are stopped 20% on each payment ) from the previous year. We offered 100% payment to our creditors in the CVA, but we are told that this Tax payment is an extra payment into the pot !! We have now struggled for a couple of months or so with the monthly payments and have been told we will have to go back to the creditors, because our CVA has failed. If we agree a new amount to pay each month, can they again take the Tax refund from last year ???
Thanks all
I'ved no idea on this one - it sounds a little complicated. One of the experts will be along to advise shortly.
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The tax rebate should form part of your working capital and be included in cashflows. It is not a windfall so speak to your IP. I assume HMRC were not a creditor in the CVA as otherwise they could have claimed offset rather than give it to your IP.
It actually depends on how your profit figures were calculated for the purpose of the CVA. In my firm we work out our clients payments by estimating the actual tax due rather than the 20% swept, in which case my clients benefit from a lower monthly payment (to assist them with ongoing cash-flow) but then the tax repayments are required to be paid into the IVA.
If the tax rebate relates to a period prior to the agreement of the CVA then it should be paid across to the Supervisor if the arrangement is to be varied to accept lower payments.
