Airedale Electricals were behind with their tax payments due to the recession, but despite being just four months in arrears, administrators say the firm were given no option by HM Revenue and Customs.
Many businesses have been given extra leeway because of the economic downturn but the taxman recently indicated that it would be taking a tougher approach, to ensure it received what it was due.
Airedale Electricals was originally established in 1998 as Logic Electric and only changed its name in 2003, when it became part of the Airedale group. Despite its long history of trading, HMRC was unwilling to consider extending terms to the company, to allow it to recover from a difficult economic period.
According to information provided by the directors when the company entered into administration, a total of £7.1 million was owing to creditors, with approximately £1 million due to HM Revenue and Customs.
The administrators acting on behalf of the firm, XL Business Solutions, confirmed that the company was given no choice over their future, after the taxman threatened them with a winding up order, if they did not pay their debt in full.
The firm has been forced to cease trading and has assets estimated at just £31,447, despite having annual sales of around £30 million in the latest accounts submitted, prior to its collapse. This means that neither the taxman nor the industry creditors are likely to receive a penny in payment.
A spokesman for HM Revenue & Customs defended their aggressive stance, saying that pursuing a winding up order was never ‘taken lightly’ and all decisions were made ‘in fairness to other taxpayers.’