Hairdressing Salon

The Company’s principal activity was that of a hairdresser and traded from premises in Cleethorpes, Grimsby. The upstairs of the premises was turned into an HD brows and makeup studio. The director, a trained hair stylist with several years of experience, had previously operated from the same premises as a sole trader, the lease was held in her personal name.

With no facility in place with the Company’s bankers, it was dependent on its own cash-flow for liquidity.

In its first year, the Company traded with modest success. Thereafter, it continued to perform at a similar level, consistently turning a small profit year on year as the business expanded to offer an ever increasing variety of beauty treatments as well as home visits for weddings and other special events.

Due to its low staff turnover, the Company experienced minimal difficulties in attracting and retaining a large and loyal customer base in the local area, with a good rapport established between long-serving staff and their clients.  At the Company’s peak, the director was supported by three additional hair stylists, two trainees (including a qualified brow technician) and one member of admin staff.

On the basis of professional advice, the director had incorporated two separate limited companies, which accounted for the revenue from the HD brows/make-up and home visit services respectively.  As the individual turnover of these companies was below the requisite threshold, it was understood that it was not necessary for them to register for VAT.

However, the Company, together with the two other Limited companies were subsequently subject to an investigation by HM Revenue & Customs in this regard and despite the earlier advice received, the initial findings suggest that the Company may be liable for historic VAT, penalties and interest on thereon going back to the commencement of trade.

As the director was aware that the Company would not have sufficient means to make payment to HM Revenue & Customs in the event of a demand for such monies, she approached AABRS and it was then deemed appropriate to place the Company into Creditors’ Voluntary Liquidation.