A MAJOR Scottish company that employed 119 people was placed into administration over a £1 million tax bill.
Apex Traffic Management Limited based in Uddingston, South Lanarkshire entered administration following court action from HM Revenue & Customs (HMRC).
The company, founded in 2017 by Daniel McGinley, specialised in traffic control for high-profile venues, including Hamilton and Ayr racecourses and The Open Golf Championship and operated more than 150 sets of roadwork traffic lights.
In the year leading up to its collapse, Apex generated revenue of £9.7 million, reports The Herald.
Despite its success, the company faced mounting VAT debt during its final months of trading, driven in part by bad debt.
One client’s liquidation left Apex £119,000 out of pocket, with an additional £108,000 written off.
Directors told administrators they had remained hopeful the tax debt could be managed and proposed a formal repayment plan that would have cleared the debt within six months.
One director said: "This offer was rejected by HMRC who would only accept full repayment, which would not have been possible given the temporary reduced cash flow as mentioned above.
"HMRC applied to the court for a winding up order.
"The directors then submitted a petition for the appointment of administrators."
Administrators said monthly charges and interest on the outstanding tax reached more than £30,000.
Despite assurances from directors that a new line of business could increase turnover by £2 million annually, the company was unable to secure a deal with HMRC.
Thomas McKay, partner at Begbies Traynor and administrator, said: "The directors had little choice but to place the business into administration after receiving a petition by HMRC for liquidation.
"Apex was a highly regarded provider of traffic management services on roads and highways across the UK, and we are working closely with all their customers to help ensure that, where ongoing projects were being delivered, these customers can find alternative suppliers to ensure safe operation of the highways."
An HMRC spokesperson said: "We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we’ve exhausted all other options, in order to protect taxpayers’ money."
The spokesman said HMRC cannot comment on individual cases due to taxpayer confidentiality, but referred to criteria laid out in the HMRC Debt Management and Banking Manual.
A Time to Pay arrangement may be offered to businesses in arrears; however, these are subject to strict conditions, including disclosure of all HMRC debts and timely notification of any change in circumstances.
HMRC may also cancel arrangements at any time if the organisation believes it is necessary to protect public funds.
Apex was established in 2017 by Mr McGinley, with lain Griffin joining as director a year later.
The business quickly secured an eight-year Scottish trunk road contract with Amey.
However, the company faced rising costs during its final year, including increases in employer national insurance contributions and the minimum wage.
The directors entered open discussions with HMRC and began a repayment plan to reduce the debt, but monthly charges and interest limited their ability to pay down the balance.
