Fri, 08 Jul 2011 | DIVISION SALE
Begbies Traynor is preparing to sell off its tax planning division as demand for its services have dropped. Its Red Flag Alert credit risk database business also faces being axed.
The decision to sell comes after the HMRC put in place “a tougher stance towards tax planning activities adopted by the Government and HMRC.”
Begbies Traynor had been expecting a spate of administrations, with chairman Ric Traynor saying, “the undertaker was polishing off the hearse again.”
Failing companies have not fallen in line with Begbies Traynor’s expectations, however. Insolvency revenues at the firm decreased significantly from £17.4 million for the year ending 30 April 2011 to £13 million for 2010.
It has also recently reported that its pre-tax profits had halved to £5.2 million for the year to May.
Traynor commented, “The past twelve months have been a very challenging period for the group, with national insolvency numbers in the UK decreasing over the year.”
“This reduced our levels of profitability which, together with the underperformance of the tax division and continuing development in the ‘Red Flag Alert’ business, resulted in a disappointing performance.”
Both the businesses facing being sold off have plenty of future potential, with further cash investment necessary, according to Mr Traynor. The firm is to hone in its efforts on its insolvency and global risk divisions.
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