Creditor Update - UK Withholding Tax Update re Payment of Statutory Interest - 17 December 2015

In our fourteenth progress report dated 12 October 2015, we set out details of a proposal to expedite resolution of a large number of small value creditors with the payment of statutory interest.  We had referenced that our ability to launch the proposal was in part subject to receipt of tax approvals.  We informed creditors on our web update on 28 October 2015 that we did not expect a near term tax clearance being received and therefore needed to delay the launch of the proposal. 

The current HMRC position could have UK withholding tax consequences on the payment of statutory interest to creditors. In these circumstances the administrators need to develop carefully their position not only in respect to creditors contemplated in the smaller claims proposal but also other larger creditors whose claims for interest will be dealt with in due course. 

In the interim, we have continued to correspond with HMRC and taken further legal advice.  We have recently shared this legal advice with HMRC and are determining what is the appropriate course of action for the administrators to take, both in respect of the small claims proposal but also dealing with a continuing difference in opinion, should that turn out to be the case. 

Further updates will be made in course.