A phoenix company is a business that is created from the assets of a previously existing business that has gone bankrupt or otherwise been dissolved. The owners of the phoenix company will often use the same name and business model as the previous company, but with a new legal structure and ownership. In some cases, the owners of the phoenix company may be the same people who owned the original business.

The legality of phoenix companies varies depending on the specific circumstances and location. In some cases, the creation of a phoenix company may be considered legal, as long as the owners follow the proper legal procedures for starting a new business and do not engage in fraudulent activities. In other cases, the creation of a phoenix company may be considered illegal if it is done solely to avoid paying creditors or to continue operating a business that has been declared bankrupt. It is important for anyone considering starting a phoenix company to consult with a legal professional to understand the applicable laws and ensure that their business is operated in a legal and ethical manner.

HMRC will issue a Notice of Enforcement when they are no longer satisfied with the debtor's attempts to pay back the debt. This may be due to unsuccessful collection attempts or a repayment plan that has not been successful. An officer of HMRC is then assigned to the case and given a Writ of Control. A Notification of Enforcement will be sent to the debtor, giving them seven days, not including Sundays or bank holidays, to contact HMRC and either pay the debt in full or arrange a payment plan. It is recommended to seek help from Inc & Co who can help resolve the issue.

Companies who owe taxes to HMRC must submit a Time to Pay Arrangement to demonstrate their ability to pay back the full amount. HMRC must be provided with evidence that the proposed payments can be met, including financial projections, cost-cutting strategies, and proof of the company's commitment to make good on the debt. Care should be taken to provide an accurate assessment of what the company can afford since offering too much may result in HMRC denying the arrangement. Generally, Time to Pay Arrangements are given a 6-12 month period, but may be extended in some cases. Payments are made through direct debit.

The UK Government created the Company Voluntary Arrangement (CVA) in 1986 in order to assist companies in need of rescue to continue trading. Unfortunately, many insolvency practitioners opt to ignore this option, as they tend to prefer the control and higher fees of administration. Implementing a CVA takes a lot of creativity, effort, and determination to succeed.

Businesses commonly struggle with debt due to things such as expensive setup costs, poor decisions, and bad luck. These debts can feel like a weight that hinders growth and could even lead to the company's demise. The CVA can help alleviate some of the debt burden, while also providing a legally binding reprieve from payment with a moratorium.

Furthermore, advantageous case law regarding CVAs allows for the dismissal of personnel and the termination of contracts, such as those regarding properties, stores, and vehicles, without any further obligations.