The Cash Flow Test

The Cash Flow Test – Can the business pay all its debts as they fall due?

If a business cannot pay all of its debts in accordance with the creditors terms and conditions the business is insolvent.

1. Does your business pay all PAYE/NI deducted from the payroll to HMRC by the 19th of the following month?

 
 

2. Can you pay your VAT on time?

 
 

3. Can you pay your income tax/corporation tax on time?

 
 

4. Do you pay your suppliers in 30 days when their invoices show terms of trade as 30 days?

 
 

5. Do you have a CCJ? Or is one threatened?

 
 

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