GLA refusal of ‘phoenix’ company licence upheld
2 April 2013
The Gangmasters Licensing Authority (GLA) has welcomed an appeals court’s upholding of its decision to revoke the license of a business whose new director’s previous company had folded, with over £100k in unpaid tax.
Tue, 2 Apr 2013The Gangmasters Licensing Authority (GLA) has welcomed an appeals court’s upholding of its decision to revoke the license of a business whose new director’s previous company had folded, with over £100k in unpaid tax.
Mahal UK of Wolverhampton, lost its licence with the GLA to supply to workers to agricultural, horticultural or food industries when Guljinder Singh applied to take over control of the business from his brother, Harpreet Singh.
The GLA found Guljinder Singh had been appointed as a director at Mahal a month after his previous company Goldline Express went bust in March 2012. Goldline had gone into liquidation at the end of January and owed £111k in unpaid tax to HM Revenue & Customs.
Mahal UK appealed against the revocation but it was dismissed this week by Birmingham-based employment judge Katherine Tucker at a Gangmasters Licensing Appeals Tribunal, led by the Ministry of Justice.
GLA chief executive officer Paul Broadbent says what had happened with Mahal UK had many of the hallmarks of a case of ‘phoenixing’ – a company emerging from the collapse of another that has gone bankrupt.
“Mahal UK had held a licence since October 2009 but the company had never actually traded,” Broadbent explained.
“What that meant was that when Goldline went under owing a six-figure sum in tax, there was an alternative already in place, with a licence ready to continue trading and debt-free. Allowing operators to fold one month with huge tax debts only to start up again the next with a clean slate is something we will continue to look out for and clamp down on in future.”
• As reported in Recruiter (February 2013), Broadbent promised co-regulation and less red tape on taking up his role in January. The GLA has since been active in terms of publicising its actions, including a clampdown on travel & subsistence schemes.
Mahal UK of Wolverhampton, lost its licence with the GLA to supply to workers to agricultural, horticultural or food industries when Guljinder Singh applied to take over control of the business from his brother, Harpreet Singh.
The GLA found Guljinder Singh had been appointed as a director at Mahal a month after his previous company Goldline Express went bust in March 2012. Goldline had gone into liquidation at the end of January and owed £111k in unpaid tax to HM Revenue & Customs.
Mahal UK appealed against the revocation but it was dismissed this week by Birmingham-based employment judge Katherine Tucker at a Gangmasters Licensing Appeals Tribunal, led by the Ministry of Justice.
GLA chief executive officer Paul Broadbent says what had happened with Mahal UK had many of the hallmarks of a case of ‘phoenixing’ – a company emerging from the collapse of another that has gone bankrupt.
“Mahal UK had held a licence since October 2009 but the company had never actually traded,” Broadbent explained.
“What that meant was that when Goldline went under owing a six-figure sum in tax, there was an alternative already in place, with a licence ready to continue trading and debt-free. Allowing operators to fold one month with huge tax debts only to start up again the next with a clean slate is something we will continue to look out for and clamp down on in future.”
• As reported in Recruiter (February 2013), Broadbent promised co-regulation and less red tape on taking up his role in January. The GLA has since been active in terms of publicising its actions, including a clampdown on travel & subsistence schemes.
