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C&E facing 500,000 bill over VAT wrangle

Roc Construction seeks compensation after cock-up over winding- up order

CUSTOMS and Excise (C&E) could be forced to stump up 500,000 because it has failed to resolve a wrangle with Roc Construction over a 2,000 VAT bill.

The problem revolves around a winding-up order issued by C&E in May 1991, claiming that Roc had failed to pay a 1,891 bill.

But the London contractor had already paid the bill by voluntary disclosure, a fact that the C&E now admits. The firm was rocked when winding-up

orders were posted in both the London Gazette and Stubbs Gazette and never withdrawn.

Managing director John Chaffey said: The fact that the notices were never formally withdrawn meant that the banks refused to give us credit, which has led to us turning down more than 1 million worth of work because we cant provide initial finance.

The next step, once winding-up orders were issued, was for Roc to appoint solicitors but, as the firm was fighting another legal case to recover a 13,000 bad debt, it could not afford to take court action.

Instead, it opted to use the parliamentary commission to try to resolve the situation and the commission ruled in Rocs favour, saying that C&E had failed to investigate adequately Rocs claim that payment had been made.

In addition, C&E offered Roc an ex gratia payment. A C&E spokesman said: Quite frankly, we made a cock-up.

We are more than willing to consider any reasonable claim, provided that it is backed up with documentary evidence, although we dont anticipate that the evidence will have to be too detailed.

But Mr Chaffey said: Initially, we only asked for 25,000 compensation and this was laughed out of court by the C&E. The effect of the winding- up order has affected our business so drastically, we are not working on any major contract at the moment. We have no option but to demand 500,000 in compensation.

It is understood that the writ has been lodged with the High Court and is expected to be formally served on C&E in the next two months.