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M&D's Theme Park goes into Administration

I run a ltd company, if it was in financial trouble and forced to administration owing money to people that were most likely not going to get paid. I dont think I could then start another company doing the same thing , doesnt seem the rite thing to do.
How could you face all those people you left in the lurch ?
 
Most of the amusement parks and companies that do it get rid of their permanent salaried staff and invite them back into roles as flexible staff/zero hour contracts which is absoutely ****ing disgusting behaviour. Not mentioning a specific park that's done this in the past few years, and is more than likely going to do it again...
 
It is not uncommon, and it’s called ‘bouncing the company.’ But it’s also not without risks. If the first business owes money it cannot pay to hmrc, which is usually the case in these circumstances, they will investigate and if it is found to have been run in an improper way, ultimately it’s directors could face ‘director disqualification’ or even prison time. https://www.gov.uk/company-director-disqualification.

Also a note to a comment a few pages back about furlough, it’s not true that having no funds in the bank excludes a company from this option. It was clear in the guidance that a company could consult with employees and if enough agreed, arrange for wages to be paid upon receipt of the grant and back dated. We investigated this, thankfully we had enough to get us through, but if we’d had to wait many more weeks for the grant it would have been a close call.
 
Nicky Borrill - I wasn't implying the company would have been excluded; if was stating a fact the company is still liable for national insurance and pension contributions and f the company doesn't actually have any money - I'm pretty sure they wouldn't have choose a route which ultimately costs them more.

Loans and grants are not right for every business, mine included - it's more cost effective to close and start up again than be in any form of debt.
 
Bentleya said:
Nicky Borrill - I wasn't implying the company would have been excluded; if was stating a fact the company is still liable for national insurance and pension contributions and f the company doesn't actually have any money - I'm pretty sure they wouldn't have choose a route which ultimately costs them more.

Loans and grants are not right for every business, mine included - it's more cost effective to close and start up again than be in any form of debt.
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Bentleya said:
Point 1. A company actually needs enough money in reserves to actually pay the staff from their own bank account - then the company can claim the money back from the government.
This means the company needs money in the first place and with the estimated amount of staff the park was employing this is easily in excess of £75,000.

Point 2. The company is still liable for their share of the National Insurance and Pension Contributions this adds to funds needed to furlough to probably a minimum of £10,000.
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Sorry I must have miss understood your point raised in point 1 then?

Also, specific to M&D’s, and point 2, remember that much of their staff would have been casual, young, seasonal and part time... The furlough scheme covers everything but employer NI. Their employer Ni contributions wouldn’t have been anywhere near as high as mine and yours would be, employing full time adults. It’s fairly difficult to earn £9.5k as a 17yr old seasonal worker on £4.35 - £4.55ph as just one example. My furlough weekly wage bill is £1900, my employers Ni is £21!!! I would hazard a guess that they have a much higher percentage of staff who they don’t pay Ni contributions for than I do.

I just don’t buy into the thinking that their staff and covid had anything to do with them bouncing the company. I think there were significant other debts and lockdown was just an opportunity to do it with the double advantage of saving face / providing an excuse... And not interfering with operations.
 
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