The construction firm behind the car park at Luton Airport, Buckingham Group Contracting, went bust in September owing HMRC a significant amount of tax
The car park burnt down this week following the explosion of a parked car.
The collapse of Buckingham Group Contracting was a result of the withdrawal of invoice finance facilities, unpaid contractor and supplier bills, and HMRC’s refusal to extend a time to pay arrangement in August 2023. There were also insufficient funds to pay employees their September salaries.
HMRC rejected the proposal for an extension to the time to pay arrangement as the company had already obtained several prior payment extensions and had not settled the tax bills. When the company went bust, HMRC was considering a winding up petition and discussions with administrators indicated that this was a high probability.
When the company went into administration, it had outstanding tax debts for arrears of VAT, PAYE, employees’ national insurance contributions and student loan repayments, and construction industry scheme deductions. As secondary preferential creditors, HMRC is likely to receive a part payment funded by recoveries on contractual claims. The amount of outstanding tax has not been confirmed in the administrator’s report but total secondary preferential claims are estimated at £25 million.
Grant Thornton administrators Rob Parker, Jon Roden and Kevin Coates were appointed on 4 September to the construction business based in Buckinghamshire and with operations throughout the UK.
In a statement Grant Thornton said that ‘following recent significant cashflow pressures and subsequent losses incurred by the business, the directors and its advisors have been working hard to deliver a successful refinancing and secure the future of the business. However, the legacy issues faced by the company and ongoing losses were simply too great to enable the refinance to succeed in an acceptable timescale’.
Grant Thornton sold off the rail contracting business to Keir safeguarding 180 jobs. However, the rest of the business closed with up to 500 job losses.