Norton Motorbikes faces £300k tax bill
10 Jan 2020
Classic motorbike brand, Norton, was in the insolvency court this week to try to resolve a dispute with HMRC over a demand for hundreds of thousands in tax
10 Jan 2020
The Donington Castle based motorbike manufacturer, Norton Motorcycles (UK) Ltd, is facing a winding up petition from HMRC over a £300,000 tax bill.
The company was at the Insolvency and Companies Court in London to try to resolve the issue.
The original tax bill was £600,000 but the Court was told that half of this had been paid, leaving the outstanding £300,000.
At Court, the finance director told the judge the company was waiting for £135,000 in R&D tax relief refunds from HMRC to enable them to pay the bill.
Norton has spent an estimated £13m in R&D in the last three years, with the latest accounts showing a carrying charge of development costs of £5.4m for 2018 alone.
In the latest accounts for year end March 2018, filed in April 2019, director and company owner Stuart Garner said that ‘intangibles had grown significantly over the last three years as the business has invested money into the research and development of new engine platforms and motorcycle ranges, being the V4 and 650cc model ranges’.
However, the auditor’s report by HSKS Greenhalgh indicated that there was material uncertainty related to going concern, with pre-tax profits of £33,701, with a year end loss after tax of £1,537, against liabilities of £3.38m based on £6.7m turnover. It also flagged incorrect reporting of development costs and government grants in prior years.
HMRC agreed to extend the time to pay and the amounts due, giving the company 63 days to settle the bill and the case for winding up was adjourned to February.
Garner, director and owner of Norton, bought the classic bike firm in 2008 and it has 85 staff, including two directors and 11 apprentices. The company’s bestselling bikes are the V4 RR, Dominator and Commando 961 Cafe Racer MK II, and it is working on new platforms for two race bikes for the Isle of Man TT races.
Norton was set up in 1898 by James Lansdowne Norton as a manufacturer of ‘fittings and parts for the two-wheel trade’ and started producing the first Norton motorcycles using French and Swiss engines in 1902.
By Sara White