Google has vowed to make changes to its global advertising business following a settlement with the French competition watchdog, which found it had abused its market dominance.
Source: Sky Business News

Ahead of the G7 meeting in Cornwall, aviation bosses want trans-Atlantic travel routes reopened.
Source: BBC

Originally written by David Tattersall on Small Business

Can I liquidate my company if I have a Bounce Back Loan?

As a company director, neglecting creditor interests will instantly land you in the firing line of an insolvency service investigation into director conduct when entering company liquidation. Taking the informal company closure route by striking off your business, also known as dissolution, is a route designed for businesses laden with no company debts. Therefore, investigations into director conduct are not conducted as standard during company strike off.

A new legislative measure preventing company directors from informally closing their business to avoid an investigation into director conduct, instead of entering a formal insolvency process, is due to come into play. The first reading in Parliament recently took place and the measure appears to come into force in late 2021.

As Bounce Back Loan repayments fall due following the optional pause on repayments, company directors will need to brace company cash flow for additional outgoings. Currently, if this route is pursued by your limited company with an outstanding Bounce Back Loan, rather than a formal insolvency route, you will likely receive an “Objection to Company Strike Off Notice”. After the rules are approved, this will ring alarm bells and kickstart an investigation by the Insolvency Service.

>See also: What happens if I can’t repay my Bounce Back Loan

Can I face an investigation over misuse of my Bounce Back Loan?

The measure aims to penalise company directors looking to escape from their Bounce Back Loan liabilities by taking the strike off route to avoid an investigation. It is in the best interests of government and taxpayers to enforce an early deterrent, as failure to do so could place pressure on the public purse as the loan is 100-per-cent government backed.

In the event of company closure, the government will be required to foot the entirety of any remaining Bounce Back Loan debts. This pre-emptive measure targets company directors looking to bolt from their repayment duties to creditors.

Is my Bounce Back Loan lender classed as a creditor?

At the onset of the coronavirus pandemic, the government heavily advertised emergency support through the Bounce Back Loan Scheme for SMEs experiencing severe dips in cash flow and disruption to revenue. Loans between £2,000 and £50,000 were made available, with loan terms extending between 6 to 10 years. Offered through a simple application form, funds were made available within 24 to 48 hours without a hard credit check.

Although this was vital for the survival of the economy, businesses at risk of becoming insolvent in the long run loaded unmanageable amounts of debt onto their limited company. Paired with the moratorium on winding up petitions, businesses highly susceptible to creditor action were granted temporary protection – delaying their demise, rather than facilitating a rescue, in some cases.

Keith Tully, partner at insolvency practitioner Real Business Rescue, said: “We are approached daily by company directors hard-hit by the Covid-19 pandemic and on the brink of collapse due to the weight of mounting debts owed to creditors.

“During the debt discovery stage, many business owners arrive at the realisation that the Bounce Back Loan is, in fact, a company liability, for which there is a named creditor.

“The friendly cloak is then pulled back from the loan which was once marketed as accessible without any hard credit check or business viability test, piling on to the list of company liabilities.”

As of March 21 2021, over £1.5 million Bounce Back Loan applications were approved and more than £46bn borrowed, including top-ups. As the economy enters recovery, the government is closing in on a loophole to prevent directors from acting unscrupulously.

>See also: Bounce Back Loan repayment calculator – how much will your loan cost?

What are the repercussions of a director investigation?

Once an investigation is launched into director conduct, if you are found guilty of abandoning your duties as a company director or falling foul of the terms of your Bounce Back Loan, you could face serious repercussions which could disable your ability to operate a business. You could be subject to director disqualification for up to 15 years, or even prosecution.

Although Bounce Back Loans were offered without tying directors to personal guarantees, you could still be held personally liable for the Bounce Back Loan if you breach the terms and conditions.

A Bounce Back Loan can only be used for commercial activity to help the business bounce back from the detrimental conditions inflicted by the Covid-19 pandemic and to stimulate economic recovery. Contravening these terms by using the Bounce Back Loan for personal use is essentially classed as fraudulent activity as you are claiming state support under the guise that it is required for your ailing business.

When taking out a Bounce Back Loan, company directors were obliged to demonstrate that their business was not in difficulty as of December 31 2019. According to the British Business Bank, a business is difficulty is classed as the following:

• Companies that have entered insolvency proceedings, such as liquidation
• Limited companies that have accumulated losses greater than half of their share capital in their last annual accounts (not applicable to SMEs less than 3 years old)
• Where the business has received restructuring aid and is undergoing restructuring

A distressed business for eligibility for a Bounce Back loan is one that is undergoing company restructuring, a procedure used to tend to businesses in financial distress. A business in company liquidation is also classed as a business in difficulty that can no longer be revived.

Are there any caveats to closing my business with a Bounce Back Loan?

If your business is genuinely unable to cope with company liabilities due to Covid-19 complications and you still want to liquidate your company with a Bounce Back Loan, you will be able to pursue company liquidation under the guidance of a licensed insolvency practitioner. Your Bounce Back Loan is an unsecured debt that will be repaid after the liquidators’ fees and preferential debts are settled. If there are no suspicions of wrongful or fraudulent trading, your business will be liquidated, and your remaining Bounce Back Loan will be repaid by the government.

If you’re unsure of your position in relation to an outstanding Bounce Back Loan and you want to liquidate your company, speak to a reputable accountancy provider or a licensed insolvency practitioner.

David Tattersall is head of client relations at Handpicked Accountants

Further reading

Government Bounce Back Loan for your small business

Can I liquidate my company if I have a Bounce Back Loan?

Source: SmallBusinessUK

Originally written by David Tattersall on Small Business

Can I liquidate my company if I have a Bounce Back Loan?

As a company director, neglecting creditor interests will instantly land you in the firing line of an insolvency service investigation into director conduct when entering company liquidation. Taking the informal company closure route by striking off your business, also known as dissolution, is a route designed for businesses laden with no company debts. Therefore, investigations into director conduct are not conducted as standard during company strike off.

A new legislative measure preventing company directors from informally closing their business to avoid an investigation into director conduct, instead of entering a formal insolvency process, is due to come into play. The first reading in Parliament recently took place and the measure appears to come into force in late 2021.

As Bounce Back Loan repayments fall due following the optional pause on repayments, company directors will need to brace company cash flow for additional outgoings. Currently, if this route is pursued by your limited company with an outstanding Bounce Back Loan, rather than a formal insolvency route, you will likely receive an “Objection to Company Strike Off Notice”. After the rules are approved, this will ring alarm bells and kickstart an investigation by the Insolvency Service.

>See also: What happens if I can’t repay my Bounce Back Loan

Can I face an investigation over misuse of my Bounce Back Loan?

The measure aims to penalise company directors looking to escape from their Bounce Back Loan liabilities by taking the strike off route to avoid an investigation. It is in the best interests of government and taxpayers to enforce an early deterrent, as failure to do so could place pressure on the public purse as the loan is 100-per-cent government backed.

In the event of company closure, the government will be required to foot the entirety of any remaining Bounce Back Loan debts. This pre-emptive measure targets company directors looking to bolt from their repayment duties to creditors.

Is my Bounce Back Loan lender classed as a creditor?

At the onset of the coronavirus pandemic, the government heavily advertised emergency support through the Bounce Back Loan Scheme for SMEs experiencing severe dips in cash flow and disruption to revenue. Loans between £2,000 and £50,000 were made available, with loan terms extending between 6 to 10 years. Offered through a simple application form, funds were made available within 24 to 48 hours without a hard credit check.

Although this was vital for the survival of the economy, businesses at risk of becoming insolvent in the long run loaded unmanageable amounts of debt onto their limited company. Paired with the moratorium on winding up petitions, businesses highly susceptible to creditor action were granted temporary protection – delaying their demise, rather than facilitating a rescue, in some cases.

Keith Tully, partner at insolvency practitioner Real Business Rescue, said: “We are approached daily by company directors hard-hit by the Covid-19 pandemic and on the brink of collapse due to the weight of mounting debts owed to creditors.

“During the debt discovery stage, many business owners arrive at the realisation that the Bounce Back Loan is, in fact, a company liability, for which there is a named creditor.

“The friendly cloak is then pulled back from the loan which was once marketed as accessible without any hard credit check or business viability test, piling on to the list of company liabilities.”

As of March 21 2021, over £1.5 million Bounce Back Loan applications were approved and more than £46bn borrowed, including top-ups. As the economy enters recovery, the government is closing in on a loophole to prevent directors from acting unscrupulously.

>See also: Bounce Back Loan repayment calculator – how much will your loan cost?

What are the repercussions of a director investigation?

Once an investigation is launched into director conduct, if you are found guilty of abandoning your duties as a company director or falling foul of the terms of your Bounce Back Loan, you could face serious repercussions which could disable your ability to operate a business. You could be subject to director disqualification for up to 15 years, or even prosecution.

Although Bounce Back Loans were offered without tying directors to personal guarantees, you could still be held personally liable for the Bounce Back Loan if you breach the terms and conditions.

A Bounce Back Loan can only be used for commercial activity to help the business bounce back from the detrimental conditions inflicted by the Covid-19 pandemic and to stimulate economic recovery. Contravening these terms by using the Bounce Back Loan for personal use is essentially classed as fraudulent activity as you are claiming state support under the guise that it is required for your ailing business.

When taking out a Bounce Back Loan, company directors were obliged to demonstrate that their business was not in difficulty as of December 31 2019. According to the British Business Bank, a business is difficulty is classed as the following:

• Companies that have entered insolvency proceedings, such as liquidation
• Limited companies that have accumulated losses greater than half of their share capital in their last annual accounts (not applicable to SMEs less than 3 years old)
• Where the business has received restructuring aid and is undergoing restructuring

A distressed business for eligibility for a Bounce Back loan is one that is undergoing company restructuring, a procedure used to tend to businesses in financial distress. A business in company liquidation is also classed as a business in difficulty that can no longer be revived.

Are there any caveats to closing my business with a Bounce Back Loan?

If your business is genuinely unable to cope with company liabilities due to Covid-19 complications and you still want to liquidate your company with a Bounce Back Loan, you will be able to pursue company liquidation under the guidance of a licensed insolvency practitioner. Your Bounce Back Loan is an unsecured debt that will be repaid after the liquidators’ fees and preferential debts are settled. If there are no suspicions of wrongful or fraudulent trading, your business will be liquidated, and your remaining Bounce Back Loan will be repaid by the government.

If you’re unsure of your position in relation to an outstanding Bounce Back Loan and you want to liquidate your company, speak to a reputable accountancy provider or a licensed insolvency practitioner.

David Tattersall is head of client relations at Handpicked Accountants

Further reading

Government Bounce Back Loan for your small business

Can I liquidate my company if I have a Bounce Back Loan?

Source: SmallBusinessUK

A coalition of transatlantic airlines have demanded that President Biden and Boris Johnson lift “overly cautious” travel restrictions between the US and UK given the strength of the two countries’ coronavirus vaccine programmes.
Source: Sky Business News

Technology giant Google was fined by France’s competition watchdog for abusing its market position.
Source: BBC

There was much excitement when, in April, the chancellor, Rishi Sunak, announced the launch of a new taskforce between the Treasury and the Bank of England to co-ordinate exploratory work on a potential central bank digital currency.
Source: Sky Business News

Staff are pushing back against Tim Cook’s declaration that most working days need to be at the office.
Source: BBC

Originally written by Christophe Pecoraro on Small Business

What’s changed with exports to an EU customer post Brexit?

The most significant changes come as a result of the UK’s exit from the single market and the customs union. Any EU customer buying products from a UK-based retailer are now subject to charges comprising import duties plus courier or postal handling fees. Naturally, the opposite of this is also true, with additional paperwork and costs applying to British consumers purchasing goods from Europe.

Unfortunately, consumer standards are not going to relax whilst retailers find ways of adapting to these new rules. Workarounds do exist and are readily being adopted. But the customs charges and extra paperwork have significantly increased the complexity and cost of shipping products in and out of the EU.

In addition to unwelcome delays, all the added cost has to go somewhere. For businesses that have been unable to cover this themselves, many have had to pass this onto the end consumer. In a period where consumers are expecting online shopping to compensate entirely for the high street experience, these effects are accumulating to a lot of unhappy customers. Suffice to say, for smaller businesses attempting to contend with the likes of Amazon, this is a tough pill to swallow.

>See also: Small businesses selling into EU face £180m in extra red tape costs

What can I do if an EU customer refuses delivery of goods sold and returns them?

Consumers have a right to change their mind after any purchase and can, as standard, return their products in a two-week timeframe from the day of sale. The retailer, therefore, has to put in place a return process which is convenient for the consumer. Refusals are a normal part of doing business online and should be expected as part of the process.

The brand has the right to deduct the cost of the return from the refund, assuming the customer has changed their mind, but it would depend on the seller’s discretion if this is deducted automatically – it’s worth checking the law of the jurisdiction in which the online retailer resides to ensure you are complying fully.

How much does it cost me if a European customer refuses to pay for delivery?

Most retailers offer free shipping above a certain order basket value. An EU customer might refuse to pay for a delivery because of a delivery issue with the carrier. In that case they can contact the brand’s customer service team and they will usually issue a refund or offer a coupon code for the next purchase.

It would be extremely rare for an EU customer to refuse to pay for delivery. It would be more likely that the customer cancels or empties the basket before confirming and completing the order. You do hear of lost revenue amongst brands, but this is almost guaranteed to be from lost sales rather than refused delivery costs.

I’ve heard that some retailers are threatening to burn goods sold to EU shoppers, is that true?

A lack of preparation has been evident throughout all of this. We are now seeing that many retailers are incapable, and unwilling, to deal with this increased complexity, leading to many reconsidering the value of adequately processing returns. Within just the first few months of the Brexit deal starting to be implemented, this aversion to reverse logistics has resulted in numerous stories within the retail space, including many reports of high street retailers threatening to burn returned products.

>See also: Half of small business exporters struggling with new rules post Brexit

What can my small business do to get round this problem?

Although daunting, the challenges themselves can be condensed into a single problem: the increased complexity and cost of the cross-border shipping between the EU and UK. Businesses don’t need to pull out of the process entirely as a result of this. The key to success will be down to their ability to disperse inventory, fulfilment and processing capabilities across the UK and EU. This is referred to as multi-node fulfilment, and this should now be a vital consideration for retailers operating cross-border.

What is multi-node fulfilment?

Put simply, multi-node fulfilment is when retailers have numerous points of fulfilment established in different areas, rather than having one core distribution centre. By recognising that spreading inventory at distribution centres out across a range of geographies is one of many benefits, retailers can look to avoid customs checks altogether as stock is flowing solely within the EU or UK.

This can work as a way to alleviate returns, with retailers shipping from the EU while processing UK returns to nearby UK facilities (and vice versa).

Retailers and brands can stay that one step ahead by reviewing existing data to determine where customers are located. By dramatically reducing processing times, having the ability to pick multiple orders at once, turning “dark stores” into mini distribution centres, or implementing an advanced Distributed Order Management (DOM) system, this can ensure your order management system (OMS) can divert orders to the appropriate inventory pool. Keeping fulfilment flexible is the answer.

Multi-node, with its distribution points, can really help alleviate the pressures that accompany peak season volume, or other episodes of key promotional activity in spreading resource. As we have seen with Covid-19, peak seasons have changed somewhat, so this will be a considerable asset going forward.

How much does it cost to use multi-node fulfilment?

Ultimately, it depends on the size of the business. The costs of the multi-node will essentially be driven by the space that the inventory will occupy in each node, plus some minimum costs to cover logistic activities such as managing inventory, as well as being ready for when sales transactions are coming. Depending on the complexity of the solution implemented, there could also be some IT costs to support the order management system (OMS).

What’s the minimum size of business that can employ multi-node fulfilment?

It’s difficult to say without asking further details from the business and its overall expectations. The model we follow helps us (and clients) simulate the size of the business when it comes to transactions that require solutions having been implemented, whilst also keeping things cost-effective. Local carriers closer to the node will be employed if they can keep the costs low.

Overall, this is entirely dependent on the brand and where they are on their journey and certain questions need to be asked:

• Are they an established brand?
• Do they see this as a cost of business vs lost revenue and how this impacts the company’s bottom line?
• Are there any other options SMEs can consider (i.e. “pop-up” distribution centre)

The concept of the “pop-up” distribution centre (DC) is another alternative.

Primarily utilised in peak seasonal periods such as Christmas, January sales and Black Friday, pop-up DCs are micro-fulfilment centres which have been known to take as little as two weeks to set up. Traditionally comprising both rented and on-demand space, these DCs can provide relief for your primary fulfilment centre and can be a considerably cheaper and more strategic option for SMEs. This is especially the case following the Brexit changes, with pop-up DCs presenting similar benefits as multi-node, such as the ability to ship to and from customers within the region.

Increasingly, as many brick-and-mortar stores downsize after a tough year for the high street, we are also seeing the ”dark store” model becoming a more popular means of micro-fulfilment, with brands looking to use excess store space as distribution hubs to get products closer to the end customer.

With our multi-node solution, RetailConnect, this helps to direct staff through pick/pack/ship processes using simple, lightweight hardware which can be kept in stock rooms and keeps orders organised. This cloud-based tech drives the multi-node fulfilment process and will assist in meeting customer demands. The importance of an omnichannel approach cannot be overlooked to maintain customer satisfaction.

Christophe Pecoraro is managing director at PFS Europe

Further reading

How to avoid paying £130,000 in VAT registration fees if you export to EU

What can I do if an EU customer refuses delivery of goods sold?

Source: SmallBusinessUK

Originally written by Christophe Pecoraro on Small Business

What’s changed with exports to an EU customer post Brexit?

The most significant changes come as a result of the UK’s exit from the single market and the customs union. Any EU customer buying products from a UK-based retailer are now subject to charges comprising import duties plus courier or postal handling fees. Naturally, the opposite of this is also true, with additional paperwork and costs applying to British consumers purchasing goods from Europe.

Unfortunately, consumer standards are not going to relax whilst retailers find ways of adapting to these new rules. Workarounds do exist and are readily being adopted. But the customs charges and extra paperwork have significantly increased the complexity and cost of shipping products in and out of the EU.

In addition to unwelcome delays, all the added cost has to go somewhere. For businesses that have been unable to cover this themselves, many have had to pass this onto the end consumer. In a period where consumers are expecting online shopping to compensate entirely for the high street experience, these effects are accumulating to a lot of unhappy customers. Suffice to say, for smaller businesses attempting to contend with the likes of Amazon, this is a tough pill to swallow.

>See also: Small businesses selling into EU face £180m in extra red tape costs

What can I do if an EU customer refuses delivery of goods sold and returns them?

Consumers have a right to change their mind after any purchase and can, as standard, return their products in a two-week timeframe from the day of sale. The retailer, therefore, has to put in place a return process which is convenient for the consumer. Refusals are a normal part of doing business online and should be expected as part of the process.

The brand has the right to deduct the cost of the return from the refund, assuming the customer has changed their mind, but it would depend on the seller’s discretion if this is deducted automatically – it’s worth checking the law of the jurisdiction in which the online retailer resides to ensure you are complying fully.

How much does it cost me if a European customer refuses to pay for delivery?

Most retailers offer free shipping above a certain order basket value. An EU customer might refuse to pay for a delivery because of a delivery issue with the carrier. In that case they can contact the brand’s customer service team and they will usually issue a refund or offer a coupon code for the next purchase.

It would be extremely rare for an EU customer to refuse to pay for delivery. It would be more likely that the customer cancels or empties the basket before confirming and completing the order. You do hear of lost revenue amongst brands, but this is almost guaranteed to be from lost sales rather than refused delivery costs.

I’ve heard that some retailers are threatening to burn goods sold to EU shoppers, is that true?

A lack of preparation has been evident throughout all of this. We are now seeing that many retailers are incapable, and unwilling, to deal with this increased complexity, leading to many reconsidering the value of adequately processing returns. Within just the first few months of the Brexit deal starting to be implemented, this aversion to reverse logistics has resulted in numerous stories within the retail space, including many reports of high street retailers threatening to burn returned products.

>See also: Half of small business exporters struggling with new rules post Brexit

What can my small business do to get round this problem?

Although daunting, the challenges themselves can be condensed into a single problem: the increased complexity and cost of the cross-border shipping between the EU and UK. Businesses don’t need to pull out of the process entirely as a result of this. The key to success will be down to their ability to disperse inventory, fulfilment and processing capabilities across the UK and EU. This is referred to as multi-node fulfilment, and this should now be a vital consideration for retailers operating cross-border.

What is multi-node fulfilment?

Put simply, multi-node fulfilment is when retailers have numerous points of fulfilment established in different areas, rather than having one core distribution centre. By recognising that spreading inventory at distribution centres out across a range of geographies is one of many benefits, retailers can look to avoid customs checks altogether as stock is flowing solely within the EU or UK.

This can work as a way to alleviate returns, with retailers shipping from the EU while processing UK returns to nearby UK facilities (and vice versa).

Retailers and brands can stay that one step ahead by reviewing existing data to determine where customers are located. By dramatically reducing processing times, having the ability to pick multiple orders at once, turning “dark stores” into mini distribution centres, or implementing an advanced Distributed Order Management (DOM) system, this can ensure your order management system (OMS) can divert orders to the appropriate inventory pool. Keeping fulfilment flexible is the answer.

Multi-node, with its distribution points, can really help alleviate the pressures that accompany peak season volume, or other episodes of key promotional activity in spreading resource. As we have seen with Covid-19, peak seasons have changed somewhat, so this will be a considerable asset going forward.

How much does it cost to use multi-node fulfilment?

Ultimately, it depends on the size of the business. The costs of the multi-node will essentially be driven by the space that the inventory will occupy in each node, plus some minimum costs to cover logistic activities such as managing inventory, as well as being ready for when sales transactions are coming. Depending on the complexity of the solution implemented, there could also be some IT costs to support the order management system (OMS).

What’s the minimum size of business that can employ multi-node fulfilment?

It’s difficult to say without asking further details from the business and its overall expectations. The model we follow helps us (and clients) simulate the size of the business when it comes to transactions that require solutions having been implemented, whilst also keeping things cost-effective. Local carriers closer to the node will be employed if they can keep the costs low.

Overall, this is entirely dependent on the brand and where they are on their journey and certain questions need to be asked:

• Are they an established brand?
• Do they see this as a cost of business vs lost revenue and how this impacts the company’s bottom line?
• Are there any other options SMEs can consider (i.e. “pop-up” distribution centre)

The concept of the “pop-up” distribution centre (DC) is another alternative.

Primarily utilised in peak seasonal periods such as Christmas, January sales and Black Friday, pop-up DCs are micro-fulfilment centres which have been known to take as little as two weeks to set up. Traditionally comprising both rented and on-demand space, these DCs can provide relief for your primary fulfilment centre and can be a considerably cheaper and more strategic option for SMEs. This is especially the case following the Brexit changes, with pop-up DCs presenting similar benefits as multi-node, such as the ability to ship to and from customers within the region.

Increasingly, as many brick-and-mortar stores downsize after a tough year for the high street, we are also seeing the ”dark store” model becoming a more popular means of micro-fulfilment, with brands looking to use excess store space as distribution hubs to get products closer to the end customer.

With our multi-node solution, RetailConnect, this helps to direct staff through pick/pack/ship processes using simple, lightweight hardware which can be kept in stock rooms and keeps orders organised. This cloud-based tech drives the multi-node fulfilment process and will assist in meeting customer demands. The importance of an omnichannel approach cannot be overlooked to maintain customer satisfaction.

Christophe Pecoraro is managing director at PFS Europe

Further reading

How to avoid paying £130,000 in VAT registration fees if you export to EU

What can I do if an EU customer refuses delivery of goods sold?

Source: SmallBusinessUK