Rates bill forces Scotline to close Goole terminal
Summons for near-$1m backdated bill renders operation insolvent.
TIMBER shipping company and terminal operator Scotline is to put its operations on the Humber into liquidation as a direct result of a £600,000 ($912,000) backdated business rates bill, which it cannot pay.
Scotline Terminal Goole, which handles up to 200,000 cu m of timber imports a year, has ceased trading and 10 people are losing their jobs, effectively from the end of February, said Scotline co-founder and director Peter Millatt.
?We have received a very large summons for backdated rates, which the company is unable to pay and which technically makes the company grossly insolvent. As directors, we cannot continue with an insolvent company,? he said.
East Riding Council had issued a court summons for an initial payment of £200,000, said Mr Millatt, but the total demand, including rates backdated to 2005, was £600,000.
This is a high-profile casualty in the crisis over the implementation of backdated rates that has been dominating the ports sector in England and Wales since 2008 and Mr Millatt predicted that others would follow.
Many local councils held back from collecting the huge rates bills during 2009, but they were now under pressure from the government ?to get the money in or else?, he added.
?The numbers we are talking about are so huge. Even when the government says you can pay it over eight years, you have both the current rates and the backdated rates, and in a very competitive industry, none of the companies are making that sort of profit to be able to survive. So it will take people down,? he said.
Scotline appealed to the Valuation Office Agency over the size of the valuation and bill. After a visit, VOA officials said the rates bill for the Goole facility should be substantially reduced, Mr Millatt said. ?However, we have had no reply following that meeting and we now have a summons.?
Scotline has operated the terminal at Goole, where Associated British Ports is the landlord, for 20 years.
?The business has kept its nose clean over that period, offering good service to the customers, but we can not go back to our customers over the past three, four or five years and say we need an increase in our rates backdated, because of the government,? said Mr Millatt.
Employees were told that they were losing their jobs when they arrived for work on Thursday. A liquidator has been appointed and Scotline will hold a creditors meeting on March 15.
As well as a fleet of eight vessels, Scotline also operates a terminal in Inverness, which is not affected by the rates issue because it is in Scotland, and at Rochester, where it owns the freehold and is also therefore not affected by the changes.
The different parts of the group are individual limited companies and thus not affected by Goole"s problems, Mr Millat said.
?The sad thing is, we have spent tens of thousands of pounds on legal and professional fees trying to defend this. When you are a small company, there is a limit to how much you can spend.?