back to article Getronics CEO on HMRC winding-up petition: An 'embarrassing' blip with cash in the wrong places

Getronics' CEO has opened up on its recent and "very, very embarrassing" winding-up petition from HMRC over non-payment of VAT, claiming it was an unintended by-product of corporate expansionism. As revealed by The Register late last month, the services integrator claimed multiple acquisitions and subsequent restructuring led …

  1. Alister Silver badge

    it is quite expensive to achieve cost cuts

    Is it only me who finds this ridiculous?

    "Oh yes, we expended $6.8million on cutting costs, it was money well spent in my opinion"

    "How much did you save?"

    "Oh, about $1.4Million"

    <boggle!>

    1. katrinab Silver badge
      Unhappy

      Re: it is quite expensive to achieve cost cuts

      And then another $5m to fix the mess caused by the cost-cutting exercise.

      Sounds like typical manglement.

    2. MJB7 Silver badge
      Boffin

      Re: it is quite expensive to achieve cost cuts

      It's legitimate though if the costs are one-off, and the saving are *per year*. (Although your example is only 20% ROI which may not actually be worthwhile in the long run.)

  2. teknopaul Silver badge

    Sounds like spintronics to me. Or perhaps gintronics.

  3. NoneSuch Silver badge
    Joke

    The money was just resting in his account.

  4. Mystic Megabyte
    Joke

    wtf?

    >> and try to metastasise that into something more

    I tried that once but luckily my doctor managed to untangle me. /s

  5. Anonymous Coward
    Anonymous Coward

    They're still not actually paying their staff in the UK...

    AC for obvious reasons.

    1. phuzz Silver badge

      Huh, well I was assuming they'd fired all the accountants that had been responsible for making sure they paid their tax bill, but maybe the accounts just left.

      Imagine how much money they must have saved when they were no longer paying taxes!

  6. Missing Semicolon
    FAIL

    Bad management

    Pure and simple. Just yelling 'cut!' and expecting things to msgically rearrange themselves is incompetent. Not having knowledge of what a company is legally obliged to do is also incompetent. Smsll eonder the credit insurers are nervous!

  7. Peter2 Silver badge

    Um.

    How did it possibly get to this stage? If you don't have the money upfront then you just agree a "time to pay" deal with HMRC and pay in installments and... that's it. We did that at work during the recession when the money set aside for paying the VAT in one lump sum had basically been raided to pay wages and other expenses and we didn't have the money to pay everything for the year in a lump sum. Hence, broken down into a payment plan and everybody moves on with life.

    We haven't had HMRC try to wind us up, at least not in any other way than the business owners yearly exclamation of "HOW F****** MUCH?!" when the yearly tax bill arrives.

    One would expect that winding up petitions are somewhat more difficult to arrive at than missing a letter or a single payment.

  8. MJB7 Silver badge
    FAIL

    Oh poor them!

    Looks like another parasite that finances itself by not paying their suppliers. I'd like to see a mandatory late-payment fee: Say 5% straight away plus 20% p/a.

  9. BrazilanBankJob

    Gerald Ratner of Technolgy

    You know the leadership of any company is rattled when they turn their fire internally.

    The Whole financial management seems to be out of control, to miss your tax liabilities is surely

    remiss of the current execs.

  10. Just An Engineer

    Wondering why most companies

    ... don't pay their sales droids on gross margin instead of revenue.

    i have been with sales that essentially give the product away at cost or less to the company, but still made the commission on the revenue.

    selling at a loss and then expecting full commission is just wrong. I have had this discussion before, but they usually say "well that is how everyone does it". Just because everyone is jumping off the building does not mean we should as well.

    If you gave them 33 % of the GM the corp makes money and the droids will do quite well.

    1. Graham Cobb

      Re: Wondering why most companies

      Probably the biggest reason is that the salespeople will not agree they should be paid less if the delivery team screw up and trash the margin.

      The second reason is that they won't wait -- they want to get the cash as soon as the deal is signed. That is how you incentivise them to close (especially when you need them to close by a deadline).

      And the third is that management decide whether they will accept the price. If they choose to buy market share, or enter a new market at a loss, that isn't the sales person's fault. You incentivise the sales person to get the highest price they can get and management decide if it is good enough. If so, they pay the commission.

      You can argue that sales commission is a bad thing, but the bottom line is that is what motivates the sort of people you need doing that job. Just like providing your engineers toys and time for personal projects motivates them.

    2. Intractable Potsherd Silver badge

      Re: Wondering why most companies

      Giving bonuses to prople for actually doing what they are contracted to is illogical. Giving bonuses just encourages people a reason to game the system and defraud anyone that gets in the way of attaining the bonus.

      1. Graham Cobb

        Re: Wondering why most companies

        Sales commission isn't a bonus: it is a contracted part of their pay.

        I have never worked on commission but I have worked very closely with those who have, and have even been offered to swap (note the word) some of my salary for commission instead. I have always declined.

  11. James Anderson Silver badge

    Getting behind on the VAT puts the company in a death spiral. Sounds like they will end up paying the max 15% surcharge on their VAT payments.

  12. Anonymous Coward
    Anonymous Coward

    I’ll tell you what’s not fair Nana

    Not paying your suppliers

    Not paying your contractors

    Not paying your staff

    Not communicating to your creditors

    And all this goes on whilst people in the business are employing family members and claiming expenses for dog walkers

    Anyone supplying this shambolic outfit with goods, time or emotion should run as far as they can from them at the first opportunity, It’s seriously in trouble.

    1. Debbynomates

      Looks Like the UK OCT payroll has been missed again, thanks NANA

  13. Anonymous Coward
    Anonymous Coward

    CEO now resigned

    It’s my understanding that the CEO is now relieved of his position.

  14. Thebluesman

    Well really.... how can Getronics pay to HMRC or for that matter staff salaries.... after all some exes need need rent paid and Getronics pay landlords directly. Some exes... even get expenses twards dog walking. Trust me I know.

    Some great people at Getronics but the guys in charge have not a clue about running a business.

  15. Nanamcphee

    A Bag of Ferrets

    Looks like the company is being hollowed out. Execs in-fighting and most looking for that last payout and personal absolution, H.M.R.C will give it the coup de grâce, Founded in 1887 and closed after 3 years of this incompetent board.

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