A Word from the Managing Director: Kirk Cheesman

It’s been a tough start to the year with retailers Ed Harry and Napoleon Perdis entering administration. With lower than expected retail sales for the Christmas period, we may see more insolvencies in the first Quarter of 2019 within this sector.

NCI have been in negotiations with Equinox Global Limited, a London based insurer, to establish a specialised ‘Top-Up’ cover solution. This development means that in the case of an existing limit not being fully approved, we can offer a solution so you can trade fully insured – find out more here.

$64,000,000 – the amount paid to NCI clients in 2018 via their trade credit insurance policies. This money goes straight back to our clients profitability, which could have been lost due to bad debts. We are proud to be able to support our clients in not only protecting against a potential loss, but also when a loss actually occurs.

Kind regards

PPSR: Expiring Registrations

The PPSR had its 7th birthday at the end of January and, understandably, there’s been quite a growth in the number of articles being written about how to deal with registrations that are due to expire.  NCI released its own fact sheet on the subject last year (click here for a copy) and our key message is simply ‘Don’t Panic’!

If your PPSR registrations are being maintained by NCI, we will make sure you are given plenty of notice of any registrations due to expire. An email will be sent 60 days prior to expiry detailing what registrations will be coming to the end of their life and then a further reminder 30 days later. You will have plenty of time to review which registrations need to be renewed and which can be allowed to lapse.  If you only have a few to renew, you can easily do this yourself via NCINet, but, if you have a large number, we will happily do this for you via a spreadsheet.  We also have people available during normal business hours to help with any queries or concerns.

The PPSA can often be fraught with complications and misunderstandings but, fortunately, renewing a registration doesn’t need to be.

Top-Up Cover: What You Need To Know

While we will always do our best to get you the full credit limit you need from your insurer, there will be times (perhaps because of capacity issues) where, although your insurer is prepared to offer ‘some’ cover, it is not as much as you actually need.

In order to fill this gap, NCI has negotiated a facility with Equinox Global Limited (an AA- graded insurer) to ‘top up’ the cover you’ve been given, potentially doubling your approved credit facility.

Premiums will be calculated on the basis of the overall risk being presented but will be unaffected by capacity issues and operate quite harmoniously with your current insurance limit.  As with most cover in this area, Equinox are primarily interested in taking on a spread of risk so while their facility is not geared towards single contract risks, it may make it worthwhile revisiting other contracts where cover has been restricted.

You can see NCI’s Top-Up Cover brochure here and you can contact your NCI Customer Service Manager to explore what options may be available to you.

ATO: Tax Debt Reporting

Buried in the Government’s Mid-Year Economic & Fiscal Outlook published in December, there is a small announcement to the effect that the Government will amend earlier plans and “increase the threshold of business tax debts that can be disclosed to credit reporting bureaus from $10,000 to $100,000”.  The MYEFO goes on to explain that “The increased threshold of $100,000 balances supporting compliance with minimising the impact on businesses with smaller tax debts by targeting higher risk tax debts”.

A requirement that the responsible Minister must first consult with the Australian Information Commissioner prior to any reporting changes being introduced has also been added.  While there is no specific date provided for implementation, it is intended to be immediately after Royal Assent is given to the enabling legislation.

Although any reporting of ATO commercial tax debt will still be of some use, the tenfold increase in the reporting threshold will clearly lessen its impact considerably and trade credit suppliers may find themselves opening accounts with customers quite unaware of an imminent winding up over a substantial tax debt.

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