Council forced to scrub £67,250 debt after soap company collapse leaves workers and HMRC out of pocket

A council is set to write off a £67,250 business‑rates debt after a soap manufacturer collapsed owing more than £229,000 to creditors, including employees and HM Revenue and Customs (HMRC).

Flintshire Council’s cabinet met on Tuesday to consider cancelling the outstanding debt owed by Westminster Worldwide Trading, which entered liquidation in February 2025.

The company, which produced handmade soap products from premises on Minerva Avenue at Chester Employment Park, had operated from the site for more than a decade before ceasing trade.

Council officers recommended the write‑off after concluding there was no realistic prospect of recovering the money through the insolvency process.

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A senior official said the move was “now necessary” following confirmation from liquidators that unsecured creditors would receive no return.

Leonard Curtis Insolvency Practitioners, appointed to oversee the liquidation, informed the council that no dividend would be available to ordinary unsecured creditors.

Companies House filings show the business owed £229,408 when it collapsed.

Employees were among the largest creditors, collectively owed £131,484, while HMRC was left with £57,370 in unpaid PAYE and corporation tax.

By the time the company ceased trading, its financial position had deteriorated sharply: insolvency documents show it held just £8,100 in cash when it entered liquidation, leaving a substantial shortfall.

The company formally entered a Creditors’ Voluntary Liquidation on February 27, 2025.

The winding‑up process began immediately, with the business vacating its premises soon after. By May 2025 the site had been cleared, and the lease was formally terminated on May 6.

In a report to cabinet members, Flintshire Council’s chief officer for governance, Gareth Owens, explained why the authority had been unable to pursue recovery action before the insolvency.

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He said it took time to gather sufficient evidence to confirm the business was the correct liable party for non‑domestic rates, meaning the initial demand notice was not issued until early January 2025.

The first instalment fell due on February 1, but the company entered liquidation before any enforcement measures could be taken.

“No further recovery action could be initiated before the insolvency commenced,” Mr Owens said.

Discussions with the joint liquidators confirmed there would be no return for unsecured creditors. While the write‑off represents a loss of public money, officers stressed it would not directly affect Flintshire Council’s own budget.

Under Wales’s business‑rates system, payments collected by local authorities are paid into the National Collection Pool for Wales, which is then redistributed among the 22 councils according to the Local Government Funding Formula.

As a result, Flintshire will not bear the financial loss directly.

Officers noted, however, that unpaid business rates still have wider implications because the collection pool is supported by Welsh Government funding.

“Non‑payment of rates does though have a wider impact on the Welsh taxpayer more generally,” the report said.

Given the company’s insolvency and the absence of any funds available for unsecured creditors, officers concluded that writing off the outstanding debt had become unavoidable.

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