ICSM Business Membership Group: fighting late and non-payment – HMRC could veto Gupta’s plans to dump debt in creditors’ deal

By Harry Mottram: He’s taking millions of pounds from the UK Government to close down the coal fired steel works in Port Talbot and to convert the industry to electricity but he’s also hoping to dump a hefty tax bill. HMRC are not keen on the idea and are considering opposing Sanjeev Gupta's plans to do a deal with creditors with his Speciality Steels UK division.

Sky News’ Kark Kleinman reported this week: “Last month, Sky News revealed Mr Gupta's intention to seek court approval for the compromise deal with creditors, with the Financial Times subsequently reporting that the tax authority would stand to lose up to 80% of what it is owed if it is approved.”

To convert the steel works to electricity will not only cost a fortune but hundreds of workers will be made redundant plus there is the matter of historic debt at the plant which would mean a restructuring of the debt – including money owing to HMRC. Gupta has already had a request for a grant of £170 million pounds rejected by the Government while a long list of creditors are waiting to see if and when they will be paid. To convert off set the huge numbers of workers being laid off the steel company is getting £500 million which will go into training staff for new industries and jobs as well as funding the electrification of the plant. So clearly the powers that be, have had enough and want the tax bill to be paid as Gupta’s Tata Steel has had plenty of taxpayers money already.

Ian Carrotte of ICSM said the steel works changing to electric power will see a big drop in the number of local suppliers need and with fewer workers the local economy will suffer. He advised businesses being asked to supply the steel works to be cautious as at the moment nothing is guaranteed. He said: “If HMRC pull the plug then it is back negotiations with creditors which will only delay payment for some suppliers and creditors.”

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ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com