MG Rover administrators looking to claw back millions in VAT

FORMER workers at MG Rover could be in line for a payout if administrators working on the collapse of the car maker can recoup millions of pounds in overpaid VAT.

The BBC has reported that administrators from PwC dealing with the collapse of the Longbridge manufacturer over a decade ago are trying to recover £56m in overpaid VAT.

If the money can be recovered then it would be distributed among MG Rover creditors, which include former workers at the plant.

Unions representing the former car workers have said that any money recovered in the process should be repaid to them.

However, the BBC said it had seen documents which suggested that former MG Rover owner, BMW, could also be eligible for a share of the money.

The MG Rover Group crashed in April 2005 – ironically just weeks before a General Election – with the loss of thousands of jobs.

Attempts to save the business proved unsuccessful and part of the assets were eventually snapped up by the Chinese.

During the intervening 10 years, administrators have managed to recover around £165m, much of it in overpaid VAT from the sale of the group’s former vehicles.
The money has been paid out to those who lost out when the business collapsed. Former factory workers have received around £600 each.

The BBC quoted original administrator Rob Hunt as saying that a claim for VAT had been made which he believed was due back to the company.

He also said that BMW had made a claim and the matter was being resolved through VAT tribunals.

BMW is quoted as saying that the matter is an issue for the courts to decide and it would abide by their ruling.