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GP firm in tax debt wins NHS contracts

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28th Nov 2013
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A GP firm has won two large new NHS deals, despite owing £164,000 to HMRC.

MP Locums Healthcare, which supplies doctors to hospitals in Britain, was facing administration over a £348,671 debt to HMRC, the Daily Record  reported.

To avoid going bust, the Polmont-based company entered into a company voluntary arrangement (CVA) last year and agreed to re-pay 47% – around £164,000 – over five years, the Record also reported.

But less than a year later, they won a share of a contract worth £500m as one of 32 agencies supplying NHS hospitals in England and Wales with locum doctors.

Locums was awarded a second contract with NHS Scotland, worth £33m, as one of 10 agencies supplying locum doctors.

The Record quoted Scottish Labour’s health spokesman Neil Findlay MSP was as saying:  “This company have taken very significant sums of money through NHS contracts. “Like every other individual and business, they have a duty to pay the taxes they owe.”

Locums declined to comment to AccountingWEB on the report, but director of insolvency at KSA Group Eric Wall confirmed in a statement provided by the firm, that Locums had entered into a CVA with its creditors in July 2012.

“A CVA is a restructuring option which can be of enormous benefit not only to the creditors, but also to the company,” said Wall.

Locums also provided a statement from a spokesman for NHS National Services Scotland, which said: “The supplier [Locums] disclosed the CVA following the initial tender submission, on the advice of the financial consultancy appointed to supervise the CVA. 

"The position was clarified with the supplier who had within the tender submission provided financial accounts and statements confirming overall turnover of the business and demonstrating compliance to minimum conditions."

“We were satisfied with the response and that there had not been an attempt to mislead and that in considering the facts around their submission it would be inappropriate to deselect the supplier.”

HMRC said it doesn’t comment on individual tax cases.

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By mikefleming3028
28th Nov 2013 12:09

Duty of care

I have just looked at the published accounts for this Company for the 4 years up to 30 Sep 2112 and for 2 of these years it showed a MINUS balance sheet. With a £348K tax debt presumably built up over a number of years (probably unpaid paye) how on earth does this Company look to be a reliable provider of services to the NHS?  If similar behavior is exhibited at any time in the  future will the person responsible for awarding the contract to them be taking responsibility or will another CVA be on the cards. Neil Findlay MSP should be asking a lot more questions about the whole process of  awarding contracts and if as I suspect  the £348K owed to HMRC was paye and was allowed to build up over a number of years then HMRC are also culpable in allowing this behavior to not only continue but to be rewarded at the expense of every compliant taxpayer. I find myself offended by the whole process and no doubt others will feel the same way. 

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By the_Poacher
28th Nov 2013 16:50

This is appalling
Why on earth should this company get away with only paying 47% of the PAYE it has withheld from employees? It's about time unpaid PAYE was made the personal responsibility of directors.

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By mikefleming3028
29th Nov 2013 09:49

Unpaid paye

I agree with "the Poacher" and would go so far as to make the case  that failure to remit paye and nic to HMRC following deduction from employees is tantamount to theft. Did the directors of this company take a salary, benefits or other forms of remuneration during the time that this debt was outstanding? I am sure that the best minds in HMRC have considered this!!!  

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