THE ADMINISTRATORS of failed law firm Pagan Osborne have applied for a tax refund to enable them to pay a “small dividend” to the firm’s creditors.
When it collapsed last September Pagan Osborne owed just under £185,000 to 53 creditors, with individual sums ranging from a staff expense of £10.20 to £34,400 to the Registers of Scotland.
In their latest progress report joint administrators Tom MacLennan and Ian Fraser of FRP Advisory said they had made a “terminal loss relief claim” which, if successful, would result in a rebate of tens of thousands of pounds.
Read more: Creditors okay plan for wind up of Pagan Osborne
Because Pagan Osborne was structured as a limited company the loss it made in its final year of trading can be offset against profits made in the preceding three years, meaning the corporation tax paid on those profits can be claimed back.
In the year to October 2014 the firm paid corporation tax of £339,937 and, after making a loss the following year, received a tax credit of £17,846. It did not file accounts for the 2015/16 year.
Read more: Former Pagan Osborne chief quits Government review of legal services
The administrators said that if the tax claim was not successful they would extend the period of administration by a year.
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