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'Naivety and taxman caused our collapse' By Chris Druce THE

25th July 2013, Page 4
25th July 2013
Page 4
Page 4, 25th July 2013 — 'Naivety and taxman caused our collapse' By Chris Druce THE
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Which of the following most accurately describes the problem?

OWNER OF collapsed haulage firm Palletline Logistics (Midlands) told CM that a mix of personal naivety and the taxman's intransigence bought down his firm.

Bob Russett, pictured, the MID of Palletline Logistics (Midlands) said that, after the haulier's entry into a company voluntary arrangement (CVA) in May last year, things had "certainly not been easy but we were getting through it".

Under the CVA, triggered after cashflow problems at the business, it was stated that creditors would be paid back 48p in the pound over five years.

At the time of the CVA, which was handled by RSM Tenon Recovery, the haulier owed trade creditors £126,000 and HMRC more than £340,000.

However, Russett exercised the right to overpay his suppliers because he thought it was the right thing to do, at a rate of 100p in the pound. "We reasoned that there would then be enough in the pot to pay HMRC back in full too," he said.

However, when HMRC discovered the overpayment it demanded its money in full within three months. This forced the business to cease trading and go into administration on 17 July.

Russett said that, with hindsight, he should have ensured a more even repayment split. Having sunk his own money into the business the collapse has left him with very little. "I don't want to hang my boots up just yet," he added.

Russett co-founded the first pallet network, Palletline Plc, in 1992 with Colin Sturgess, John Watt and Ken Hackling. The network founders went on to set up what is now Palletline Logistics (Midlands) in 1993, before Russett bought it out in 2006.

Palletline Logistics (Midlands) remained a member of the Palletline network, although a completely separate legal entity, until its demise.

Palletline Plc members Taskforce Movement and Storage and Panic Transport have taken on extra delivery areas, while Global Logistics Central has been recruited to cover the rest of the area made available by the Birmingham-based haulier's demise.


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