PwC tells HMRC to pay up 10 years after MG Rover collapse, claiming £56m in overpaid VAT

 
Catherine Neilan
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MG Rover plant at Longbridge in 2005 as the car giant entered administration (Source: Getty)

PwC is tapping HMRC up for £56m in overpaid VAT, 10 years to the day that the car giant entered administration.

The financial services firm, which handled MG Rover's administration and subsequent liquidation, is claiming the taxman received excess payments on vehicles manufactured by the Midlands-based group and supplied to fleet operators “dating back a number of years”.
The matter is subject to litigation as there are competing claims as to who is entitled to the repayment, PwC said. Unions are arguing that any recovered funds should be paid to employees.
The failure of MG Rover – the UK's last domestically-owned mass production car manufacturer – resulted in around 6,000 people losing their jobs. PwC said the fallout from the 2005 collapse had continued into this decade. It is still pursuing other claims on top of the VAT matter.
The liquidators have realised £165m to date, and processed and agreed more than 5,600 claims from unsecured creditors - including former employees and the Pension Protection Fund- worth £803m. Around £80m has been returned to creditors.
Some 4,000 claims from former employees have also been agreed and paid in full.
Some car production continues at the Longbridge site.
Rob Hunt, partner at PwC and one of the original administrators, said: “The MG Rover collapse was a significant event for a number of reasons – first and foremost for the many employees and families it impacted.
“MG Rover was part of the engine house of the Midlands economy and it was a major shock to witness its demise. The size and complexity of the job now sees us pass the 10-year milestone, but we have made significant headway in that time. We’ve returned almost 10p in the pound to creditors- double the 5p that was estimated at the start.”
“We will continue to consult with the creditors’ committee, to provide updates and agree our ongoing strategy. The members of the committee are from the key creditor groups, namely trade suppliers, credit insurers, the dealer network, the Pension Protection Fund and former employee’s. That group has remained constant since the start of the case.
“Any further dividend to creditors depends upon recoveries from the remaining claims and we will continue to work hard for the many people affected by MG Rover’s collapse.”

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