Enta Technologies has thanked its suppliers for sticking by it after a petition from HMRC to wind up the distributor was dismissed at the High Court on Thursday.
The winding-up petition – which was advertised in the London Gazette on 29 May only to be retracted a day later – was set to be heard at the Royal Courts of Justice today.
The dispute involved roughly £1m of VAT HMRC mistakenly believed the distie owed it, according to Enta Group owner Jason Tsai.
To recognise the fact the petition should not have been advertised in the first place, HMRC has also agreed to pay the legal costs Enta incurred in defending the petition, Tsai told CRN.
Tsai said the dispute arose over a simple misunderstanding over how the distributor accounts for inter-company sales between Enta Technologies and parent Entatech UK Ltd.
The situation came to a head when the distributor was slow to get back to "one or two" letters from HRMC over the matter when its chief accountant was off sick, Tsai said. Although HMRC was sympathetic to Enta's situation once the duo had met to face to face, it wanted another two weeks to examine its accounts in detail - prompting the distributor to take the case to the High Court, Tsai added. A notice confirming the petition had been dismissed appeared in the London Gazette on Friday.
The initial notice in the London Gazette prompted credit insurers such as Atradius and Coface to temporarily withdraw cover but Tsai said that "99 per cent" of its vendor partners had continued to trade with the distributor in the intervening period.
Tsai said he was grateful for the support his firm had received from suppliers, customers and staff.
"No customers or sales were affected," he added. "One or two suppliers felt nervous and said they could not accept purchase orders from us for a few days, but these were not major vendors and we had enough stock anyway," he said.
Tsai said Enta had learned from its mistake of not replying promptly enough to HMRC's letters but hit out at the government department for not formally apologising for the debacle.
"The whole episode can be described as civil servants syndrome," he said. "There is no accountability when civil servants make mistakes and nobody takes responsibility."
HMRC declined to comment, saying it does not comment on individual cases.
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