Administrators, Leonard Curtis, were appointed shortly after the company’s invoice finance provider filed a winding up petition. HMRC were also owed outstanding debt to the sum of £1.1million, which was only discovered when external accountants investigated the financial accounts.
A previous employee in charge of the books had failed to keep accurate accounts and it was only in March this year when he left (and Meadows Chartered Accountants were brought it), that the truth came out.
The manufacturer had accounts showing a pre-tax profit of £155,000 in the nine months to June 2013, but in actual fact had made a loss of £233,000. The investigation led to the realisation that HMRC was owed substantially more than originally thought.
BCI had previously been in contact with HMRC over a time to pay deal (TTP) back in 2012 when investment firm, Hughes Armstrong Corporate Investment helped to pay off the debt.
Unfortunately, the company were unable to comply to a TTP this time round and the company went into administration.
BCI Brewchem (Anglia), owned by Hughes Armstrong himself, successfully bought the company quickly after administrators were appointed, in a pre-pack deal.
This case shows how important it is to have a qualified accountant in place to look after the finances. Without accurate accounts and audits, it’s impossible to successfully manage a business.