HMRC has filed a petition to wind up a North East energy brokerage while it is in the middle of a restructuring process.
Great Annual Savings Group (GAS) is among a number of regional energy consultancies which have expanded at a rapid rate in recent years and currently has around 160 members of staff at its head office in Seaham, County Durham. The company – launched 10 years ago and a former Sunderland shirt sponsor – helps businesses to reduce their variable costs in energy, water, telecoms, merchant services and insurance and has around 14,000 customers across the UK and Ireland.
Despite the pandemic, which led to the company furloughing large numbers of staff, revenue remained consistent at around £20m in most recent accounts covering the year ended June 2021. However, the last year has seen the firm reduce its headcount from 300 to its current level of 160 employees and it has also been battling rising costs.
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In its recent accounts the company highlights how it has carried out forecasts of its finances, to include outstanding HMRC liabilities which has arisen during the pandemic, but directors said that an arrangement for repayments had been put to the Government department.
Now, the company has revealed it has brought in business advisors from FRP Advisory and Shoosmiths, amid efforts to “rightsize” the company and return to growth.
Yet before the firm’s restructuring proposals have been finalised, HMRC has raised a petition to wind up the company, which is set to be heard at the High Court in London on December 7.
The appointment of the two restructuring specialists and the move by HMRC comes after a period of expansion at the business, which had invested a multimillion-pound sum into its head office at Spectrum Business Park to accommodate a growing workforce.
The firm – which was Sunderland’s main shirt sponsor for two seasons until earlier this year when Spreadex secured a new SAFC deal – had announced it was quadrupling its office space, with plans for the new office including zen rooms, an arcade, a gym and catering facilities.
A spokesperson for Great Annual Savings Group (GAS) said: “GAS is disappointed in this course of action, which goes against a previously indicated timeline of actions with HMRC. This course of action will not affect GAS customers’ contracts or the services they receive from GAS. Like most UK businesses, GAS has been significantly impacted by the Covid-19 pandemic, subsequent energy price crisis and war in Ukraine. Despite these challenges, GAS still has a good underlying profitable and cash generative business, which, following a restructuring of the legacy debt, can continue to grow and meet the needs of its stakeholders into the future.
“Recently, GAS has appointed FRP Advisory and Shoosmiths LLP to work on a restructuring proposal. These businesses are experts in their field and the proposal is now at an advanced stage and will soon be presented to creditors. GAS has engaged with HMRC on the relevant details of the restructuring proposal, which would remove some of the pressures of dealing with legacy Covid-19 debt and enable rightsizing of the company. This would allow it to build on the positive performance of 2022 and enable the company to return to growth; ultimately protecting over 160 UK jobs.
“Despite this, HMRC have refused to engage with that process to date and have, in the view of GAS, actively sought to accelerate pressure on the company, which has included the presentation and advertising of the winding up petition on Friday. This action could be perceived as an attempt to frustrate the restructuring process. GAS looks forward to completing the restructure as soon as possible and returning to growth.”
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.”
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