INS10169 - Introduction to Voluntary Arrangements

Provision for payment of all future statutory liabilities on time

Provision for payment of all future statutory liabilities on time means that

• Cash flow projections must show a reserve for future statutory liabilities such as tax PAYE/NIC and VAT on pre-determined dates
• It must be possible for the business to survive and pay a dividend to its existing creditors without running up further debts
• • The problems which gave rise to the past debts have been eliminated
  • There should be an income stream to meet all commitments.

A proposal is not viable if it robs future creditors in order to make payments under the proposal.