Kennedy urges sense over Gaeltec liquidation threat

12.00.00am GMT Wed 24th Feb 2010

Ross, Skye & Lochaber MP Charles Kennedy has today urged the Secretary of State for Scotland to intervene in the case of a Dunvegan-based business, Gaeltec Ltd, facing liquidation at the hands of Her Majesty's Revenue and Customs.

Mr Kennedy was contacted by the firm over HMRC's unwillingness to delay repayment of £28,000 outstanding employers' national insurance contributions from 2008. A consultant acting on the firm's behalf has estimated that the cost to the public

purse of redundancy payments alone could amount to £120,000.

Speaking in the House of Commons, Mr Kennedy said:

"For a business to be facing liquidation over £28,000, for redundancy payments that would come to the region of £120,000 plus subsequent unemployment and related benefits, makes no sense to the public purse whatsoever."

He urged the Secretary of State for Scotland, Jim Murphy, to join him in lobbying the Revenue and Customs to adopt a more reasonable approach.

Responding, Mr Murphy said:

"While not getting into the specific detail of the business relationship with HMRC of that one company, I think [he] would be reassured to know that the business payment scheme set up by HMRC has allowed 17,000 Scottish companies to delay the

payment of taxes totalling £300 million across Scotland, but I'll happily look into the specific matter which he raises."

Commenting after the exchange, Charles Kennedy said:

"It cannot possibly make sense for HMRC to force a good company to the wall when, by doing so, it will greatly increase the cost imposed on the public purse, and destroy jobs at the worst possible time. I very much hope the Government will listen, and

ensure the Revenue takes steps to put an arrangement in place that allows Gaeltec to continue.

"I welcome Jim Murphy's assurance that action is being taken by HMRC to help businesses, and that he will investigate Gaeltec's particular circumstances. Clearly, the constructive approach which lies behind the Business Payment Support

Service has not been in evidence in their particular case, and I hope Ministers will make sure Revenue officials now pursue a different course."

ENDS