UK Phone Retailer Makes 80 Staff Redundant

UK based phone retailer, JAG Communications has again evaded a shut-down, this time by making 80 staff redundant to cut costs. The company technically collapsed earlier this year, but moved the functioning assets into a new holding company.

The earlier collapse was caused by a £2 million tax bill that the firm was unable to pay to the government's tax collector, the HMRC. After the assets were moved to a new company, the HMRC demanded a prepayment deposit of sales taxes to prevent a similar situation occurring again. It was this deposit demand that nearly closed the company for a second time.

The UK trade magazine, Mobile Today reported that JAG CEO, John George is attempting to mollify HMRC by promising to pay the VAT bill in monthly instalments of £150,000 instead of the prior quarterly arrangement, and claimed to have offered to pay VAT up front.

He said: "Fundamentally, 80 people are out of a job because of VAT. We are not in buoyant times and I have to assume things aren't getting any better."

The UK tax collectors have been clamping down on so-called "carousel fraud" where companies produce bogus shipments of mobile phones and claim the sales tax on the shipments. However, the clamp-down is also claimed to have trapped legitimate firms in disputes and demands for payments of taxes before they are due.

On the web: JAG Communications

Posted to the site on 12th June 2009