East London Liquor Company
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Founder of East London Liquor Company buys business out of administration 

After being forced into administration following HMRC’s ‘unreasonable demands’, founder Alex Wolpert has bought his independent business back. 

Were you one of the people who popped down to the East London Liquor Company to pick up a bottle of their noted gin for a Christmas present, only to be told their stock was gone and the bar was closing?

Since opening in 2014, the distillery has become an undeniable staple of Bow, reinvigorating spirits production in the industrial heart of the East End. For nine years, the much-loved bar has been serving us its crisp beer on draught and a vast range of fanciful cocktails, but the future of the Bow Wharf location hangs in the balance.

On Tuesday 12 December, East London Liquor Company (ELLC) was forced into administration following an unsuccessful negotiation with HMRC (His Majesty’s Revenues and Customs). That day, founder Alex Wolpert and other shareholders bought the business out of administration, allowing Wolpert to retain ownership of the Bow-based craft distillery.

According to Wolpert, HMRC placed ‘harsh new conditions’ on ELLC’s Time to Pay Agreement, leaving him no choice but to go into administration following unpaid tax. He wrote on LinkedIn:

‘The new terms set out by HMRC have not only come completely out of the blue, but they are simply untenable and unviable for us as an independent business to pay while also continuing to raise funds to further existing growth.

‘With HMRC’s recent and unreasonable demands, our business can no longer operate in its current form.’

Wolpert told The Grocer that HMRC demanded £200,000 upfront by the end of November, a tax debt too high to burden for the business which lost 90% of its sales during Covid and which currently faces inflation across its supply chain. He said:

‘During lockdown, we were unable to trade and we were therefore unable to pay our tax liabilities. We had no revenue, and we had to be inventive and creative about generating it. 

‘Every year we have renegotiated our Time to Pay Agreement – the next 12 months of paying back the debt load. We needed a viable long-term repayment plan, but HMRC did the opposite. They asked us for a chunky, large amount of money to reduce the overall debt.

‘The advice we got was that they’re doing this across the board, and if they’re asking you for one big large sum to reduce the debt, nothing’s stopping them from asking for another lump sum. It just felt very risky.’

Following failed negotiation with HMRC, ELLC was left with no choice but to fall into administration, but Wolpert and existing board members bought back the business in a pre-pack administration deal, securing the future of the popular spirits producer. He said:

‘The paperwork has now been filed and we continue to operate the business with the same hard graft we always have. I want you to know that we are still the same distillery and brand we always have been, but that we’ve had to make uncomfortable choices in order to survive in the current climate.’ 

ELLC is but one of the many independent businesses in the hospitality sector that were badly impacted by the pandemic. The effect of several lockdowns on the distillery’s profit margins meant staff cutbacks were inevitable, leaving a small team with a large workload. 

Time to Pay Agreements allow struggling businesses impacted by Covid the option of paying tax through monthly, affordable instalments. A Time to Pay Agreement can cover all outstanding amounts overdue, including penalties and interest. When approached for comment about the failed negotiation with ELLC, a spokesperson for HMRC said:

‘We take a supportive approach to dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances.’

While the future of the premises at Bow Wharf is unknown, we can still purchase our favourite gin, whiskey and vodka distilled by East London Liquor online, and at several public houses around the East End, from The Angel of Bow and The Sun Tavern to Bethnal Green Tavern. Wolpert said:

‘Thank you for the community and support over the last nine years, it’s been phenomenal. We don’t want to go anywhere, we just need to do some inward thinking about what’s best practically and financially.’

For more about local businesses, read Mexican Seoul taco bar finds its first permanent home in Bow.

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