Close my Hotel
The hotel sector provides significant employment opportunities across the UK and is fundamental to our economy. It allows local and rural communities to thrive when trading conditions are favourable, but hotel businesses are facing several issues at present.
When a hotel closes down due to financial issues there can be a severe ripple effect through the local community. It may affect other businesses in the area that supplied the hotel, for instance, and their employees.
So what are some of the problems that hotels are experiencing and how do we support the hotel sector in the UK?
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Why are hotel businesses closing?
A shortage of staff following our exit from the EU and soaring operational costs have exposed hotel sector businesses to significant financial and operational instability. If a hotel business is experiencing cash flow issues or is unable to function properly due to a lack of staff, there may be no alternative to closure.
This can be devastating for the owners but there is a formal procedure that offers an exit from the prolonged uncertainty that typically accompanies financial distress. On the other hand, some solvent hotels may need to close for more positive reasons, such as the owners’ retirement.
Specialist advice for the hotel sector
Company Closure has extensive experience in helping hotel sector businesses to close down and will provide the reliable guidance you need. It is important to seek regulated insolvency advice, however, as licensed insolvency practitioners are the only professionals who can conduct these statutory procedures.
Our team offers free, same-day consultations and we operate a nationwide network of local offices, so please get in touch to find out how we can help.
Closing down an insolvent hotel business – Creditors’ Voluntary Liquidation (CVL)
Insolvency means that a business cannot afford to pay its bills as they fall due, and/or that the value of its liabilities exceeds that of its assets. It is always advisable to obtain professional confirmation of a business’s financial status as it determines how directors should proceed if they want to close down.
Creditors’ Voluntary Liquidation is a process available for insolvent businesses, which safeguards creditor interests. A licensed insolvency practitioner is appointed and creditors are repaid as far as possible using the proceeds of a business asset sale. CVL also protects the business’s directors, and provides a path to close their hotel in an orderly manner and meet all statutory requirements.
How to close a solvent hotel – Members’ Voluntary Liquidation (MVL)
Members’ Voluntary Liquidation can be a tax-efficient way to close a hotel that is financially healthy and is typically appropriate for businesses with £25,000 or more in distributable profits.
A member’s distribution is subject to Capital Gains Tax (CGT) and if they can claim Business Asset Disposal Relief (BADR) their liability can be lowered to an effective rate of 10 per cent. A licensed insolvency practitioner must conduct the process and carry out all the required administration, including liaising with HMRC and Companies House.
25,000+ Company Directors Supported – Partner Led Service
At Company Closure we have a nationwide team of licensed insolvency practitioners and company closure experts here to help you understand your options. Whether your company is solvent or insolvent, there is a closure method out there to suit you.
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