(Image: Google)
A profitable family-run Scottish company operating eight hotels was placed into administration following an HMRC tax bill dispute.
The estate is operating normally as the South Lanarkshire-based hotel group’s portfolio is marketed for sale amid a “substantial volume” of inquiries and tax debt is expected to be covered, as events leading to the administration are revealed for the first time.
Strathmore Hotels Limited, headquartered in East Kilbride, has sites including the Ben Wyvis Hotel in Strathpeffer, Royal Hotel, Oban, and the Salutation Hotel in Perth, said to be one Scotland's oldest hotels, and is a large-scale operation with over 800 rooms.
Administrators have outlined events leading up to the move last month, while a spokesperson for His Majesty’s Revenue and Customs said it only takes court action when all options have been exhausted.
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Joint administrators from Interpath, appointed in August, stated: “The company is a family-run business, which was incorporated in 1990.
“It operates a portfolio of eight three-star hotels, six of which are owned on a freehold basis, one is occupied on a long lease, and one is occupied on a virtual freehold basis (a very long lease).”
The Cumbria Grand. It was listed at an asking price of £2.75m (Image: Google)
Around 400 staff working in the hotels have been kept on with three of the seven head office made redundant. Another creditor, Handelsbanken, which was owed £11.1 million, moved towards administration.
The administrators continued: “The company had been involved in a long running dispute with HMRC, who had claimed that there were significant VAT payments overdue, and, to a lesser extent, other unpaid tax liabilities.
“The claim includes a combination of VAT and other tax liability assessments made, late payment charges and interest on overdue sums.
“On July 22, HMRC presented a petition for the company's winding-up in relation to outstanding balances totalling £2.8m."
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Interpath added: "Upon learning of presentation of the petition, which sought appointment of an interim liquidator, Handelsbanken appointed Alistair McAlinden and James Dewar as administrators, under the terms of its floating charge.
“This course of action was motivated by a desire to have a controlled insolvency process, protect asset value and to enable the insolvent estate to benefit from the moratorium protection and comparative flexibility offered by an administration appointment in comparison to a liquidation process.”
Draft accounts for 2024 report turnover of £20m and a profit after tax of £800,000. Management accounts for 2025 indicate the company achieved an operating profit of £5.6m from a total turnover of £22m.
Christie & Co was instructed to market the hotels, ranging in price from Nethybridge Hotel at £1.75m to the £6.5m Ben Nevis Hotel & Leisure Club and with a total combined asking price of £35m.
Other hotels include Alexandra Hotel in Fort William, Cairn Hotel in Harrogate, and Cumbria Grand Hotel in Grange-over-Sands.
Sufficient funds
Interpath added: “It presently appears that sufficient funds could be generated from sales of the hotels to enable all of the company's secured and preferential creditor claims to be paid in full. The outcome for unsecured creditors and shareholder will depend on the value achieved from the sale of the hotels.
"With assistance from a specialist hotel management agent, we are continuing to trade the company in the administration in order to maximise recoveries from its principal assets, being the hotels.”
Mr McAlinden, who is also head of Interpath in Scotland, said at the time of the administration: “The hospitality sector has faced a number of significant challenges in recent years, including rising operating costs, inflationary pressures, workforce shortages and changing consumer spending patterns."
A spokesperson for HMRC said it cannot comment on businesses because of taxpayer confidentiality law, but did say: “We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we’ve exhausted all other options, in order to protect taxpayers’ money.”