At the meetings of members and creditors held on 5th January 2017 the company was placed in to creditors voluntary liquidation and Mike Fortune and Carl Faulds of Portland Business & Financial Solutions were appointed joint liquidators.
The company commenced trading in April 2010 following an amalgamation of a number of scaffolding businesses and operated from leasehold premises in Portsmouth, Hampshire. It soon developed a good reputation in the local area helping turnover to increase quickly. Trading appeared to be going well with healthy profits being reported in the company’s accounts in 2013 and 2014.
In early 2015, it came to light that the company had some issues following a VAT inspection. It transpired that the company had significantly underreported its VAT liability meaning a significant debt was owed to HM Revenue & Customs (“HMRC”). The directors decided to instruct an independent firm of accountants to undertake a forensic accounting exercise to establish the correct position.
During 2015 the company also had equipment stolen, which was uninsurable as it was kept in the open. Although the incidents were reported to the police, the company was unable to recovery the items or claim any money to replace them. This caused further issues for the company while it was trying to establish its correct financial position and reach an agreement with HMRC to settle its debts.
It was proving difficult to establish the correct position for the company as not all the required information was available for the new accountants to complete their investigations. The directors sought insolvency advice from Portland as it had become clear that the company was insolvent a consequence of the HMRC debt. The directors continued working with the accountants to try and establish the true financial position of the company and confirm if they company could be rescued. Eventually HMRC agreed to waive the penalties but the VAT liability remained outstanding. Due to the financial strain put on the company as a result of the VAT liability and other issues experienced, PAYE and NIC liabilities began to accrue.
The directors tried to put a plan in place to settle the liabilities over time but by December 2016 it was clear to the directors that the debt to HMRC was too large to manage. The directors concluded that the business was no longer viable and the company ceased trading in December 2016.
Creditors are able to access the first report here.