HMRC crackdown leads to Manches administration

The grim details of Manches’ downward slide are revealed on today, exposing an unpaid tax bill which forced the firm into administration prior to its takeover by Penningtons.

Penningtons ended up paying just £500,000 for Manches’ work in progress despite originally setting out for a merger of equals. When the two firms first started talking in September Penningtons was unaware that Manches was close to exceeding its £6.4m overdraft facility.

As The Lawyer reveals today, Manches also had an unpaid tax bill worth £625,000 and partner’s personal tax liabilities totalling £1.1m. With its bank refusing to extend the overdraft Manches found itself unable to pay its indemnity insurance bills.

It was a lethal cocktail that resulted in HMRC issuing a notice of action against the firm and spelled the end for Manches as an independent entity.

With more than 150 firms still trying to find insurance, this is unlikely to be the last time The Lawyer reports such a story.

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