End of Tax Year, Start of Trouble? How to Spot the Warning Signs of Financial Distress Before It’s Too Late
SPOTTING FINANCIAL TROUBLE EARLY COULD BE THE DIFFERENCE BETWEEN RECOVERY AND INSOLVENCY
As the dust settles on the end of another tax year, many business owners find themselves at a financial crossroads. It’s a time for reviewing performance, paying outstanding liabilities, and preparing for the year ahead — but for some, it’s also when financial cracks begin to show.
For many, April can be a turning point. The pressure of settling year-end tax obligations combined with ongoing economic challenges often exposes deeper issues within a business. The good news? Catching the warning signs early gives you more time, more options, and a better chance at recovery.
WHY DOES FINANCIAL DISTRESS OFTEN SURFACE AFTER THE TAX YEAR ENDS?
The end of the tax year forces businesses to take a closer look at their accounts — and that’s when patterns can emerge. Whether it’s a growing tax liability, delayed payments to creditors, or a widening gap between cash inflow and outflow, these indicators can be a red flag for future insolvency risk.
For some companies, seasonal downturns following Q4 (like post-Christmas slumps) add even more strain. Pair that with rising costs, tighter lending conditions, and a challenging trading environment in 2025, and it’s easy to see why this is a high-risk period for many UK businesses.
THE 6 KEY WARNING SIGNS OF FINANCIAL DISTRESS
Here are some of the most common early warning signs a business owner can identify:
Consistently late payments to HMRC or other creditors
Mounting creditor pressure or legal action
Cash flow shortages despite steady turnover
Relying on short-term borrowing to stay afloat
Falling behind on payroll or making late salary payments
Lack of visibility or poor financial reporting
WHAT SHOULD YOU DO IF THESE SOUND FAMILIAR?
If you’re noticing one or more of these signs, it’s important to act early. Here’s what we recommend:
· Don’t ignore the problem. It rarely gets better without intervention.
· Speak to a qualified professional. The earlier you get expert advice, the more options you’ll have.
· Book a free, confidential business assessment with a professional. They’ll help you understand your current position and what solutions are available.
CONCLUSION: EARLY ACTION LEADS TO BETTER OUTCOMES
A new tax year is a chance to reset, reassess, and regain control. If your business is under pressure, know that help is available. At Voscap, we support businesses at every stage of financial difficulty — with honest advice, practical solutions, and a clear path forward.
If your business is in need of an Independent Business Review, contact the IBR experts at Voscap today on 020 7769 6831, or email help@voscap.co.uk.
ABOUT VOSCAP
Voscap’s primary objective is to save your business. Our team of experts’ knowledge in restructuring and turnaround assignments is invaluable when assessing the best option available to your needs. With experience spanning several decades, we have the skill and resources to provide viable solutions within all industry sectors. All organisations go through difficult times and we are here to help. From small to multi-million turnover businesses, we have dealt with the most complex of cases. We offer an initial free assessment in analysing your financial position and providing clear and precise advice making your experience a simple non-complicated process.