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OHG liquidator working on amicable settlement with HMRC
Liquidators of the failed online travel agency OHG Accommodation are trying to reach an out of court settlement with HMRC over £2.74 million in disputed VAT payments.
Daly & Co revealed in its progress report lodged with Companies House that the legal proceedings it started against HMRC following the collapse of OHG had been stayed.
Liquidator Philip Malachy Daly said his solicitors had been in correspondence with HMRC in the hope of reaching a settlement.
"When all the Revenue’s queries and information requests have been fully complied with I would hope that I will be able to come to a settlement agreement with the Revenue," he said.
"If no such offer of settlement is forthcoming from the Revenue I would then have to seek further specialist advice from my lawyers as to my chances of success in the Tax Tribunal proceedings and in any subsequent court proceedings should the case be referred to court."
Steve Endacott, chief executive of OHG which collapsed two years ago, has always maintained that HMRC had overcharged the company VAT over a four year period because it mistakenly classified it as a tour operator when in fact it was merely as an agent of overseas hotels.
The sale of services to companies abroad is zero-rated for VAT purposes.
OHG had expected HMRC to refund the money after the Supreme Court ruled in March 2014 that VAT paid by Secret Hotels (previously known as MedHotels) should be refunded.
"It has always been believed by the company’s director and by the company’s lawyers that the company’s situation was very similar and in fact there may have been even stronger justification for monies to be repaid than was the case in Secret Hotels 2," said Daly.
He said there were a number of other travel companies in the same situation as OHG who were seeking VAT refunds based on the Secret Hotels 2 ruling, but HMRC has not agreed to any further refunds to date.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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