The boss of Lathams of Broughton says the ‘double blow’ of HMRC pulling out of the deal and rising butter and wheat prices has crippled the business

He said: “We’ve worked so hard to stay afloat during Covid, switching to afternoon tea takeaways, delivering meals and essentials to frontline workers. It’s been a huge effort. We’ve been doing thousands of meals a day to support people through the pandemic.

“And now it is really disappointing that the government has simply turned around and abandoned us.

“We had an agreement with the tax authorities and were in a five-year repayment plan for the amount we owned for two years.

“It’s a big amount of money and a few months ago they came along and said, ‘that deal is no longer valid, we need that amount of money’.

“It’s almost ‘mafia-like’ behaviour to be honest, I said that to someone. I feel absolutely screwed.”

Mr Barton said he and others could not raise the £250,000-plus in such a short time and had no choice but to wind down their operations.

He said: “We have a two-tier tax system. There are people who try to circumvent the system and then we pay every penny in the agreement that we had.

“How can they just change the playing field? If you have a mortgage that is fixed for five years and you make those payments, you keep a roof over your head.

“We tried to fight it but were told that these are the rules and here we go. They were told to be stricter because they say they don’t have any money either – so something has to be done, and in our case that’s the whole business.”

Lathams was founded as a family business in a kitchen in Broughton in the 1970s and quickly gained an excellent reputation for its pies.

Mr Barton said that the surviving family members – following the death of Gwen Latham in April this year – had been extremely supportive in his efforts to save the business, as had businesses such as Booths, which he supplies. Mrs Latham had worked with him to set up the payment plan with HMRC before she died.

He said: “Everyone has worked really hard and been as accommodating as they can – but it’s not just about the income, the costs for us have also gone through the roof because of the economy and inflation.

“Wheat has more than doubled, butter has tripled, baking a cake is now very expensive – even just turning on the ovens with what has happened to gas and electricity prices.

“I worked as hard as I could and paid myself the minimum, while trying to protect the jobs of our staff as best we could.”

Mr Barton, who formally filed for Lathams of Broughton to be wound up in early August, says he is still hopeful a deal can be struck with a new bakery operator.

He said: “We hope that someone will come and take over the construction site.

“They will not take over the company because there are debts, which they cannot bear, but there is a chance for a new start.

“The Lathams name will not remain, but I understand there will be a nod to the heritage, but with a modern twist.

“Hopefully we can transfer some staff to the new bakery once it is operational.

“We are going to formally close at Fulwood and stop delivering for a period of time. It will be a sad day. There is no doubt about that.

“But I want people to know that we’ve always done our best and that it’s all made from scratch here. So no, there won’t be a big bake sale because it’s not like we have a ton of stock. It’s made fresh.”

According to the most recent figures, Lathams had 85 employees, but Mr Barton said this number had already fallen due to challenges within the business.

According to the most recently filed accounts, which run to 31 May 2023, the company had debts of £546,000 due within the coming year. This was significantly less than the £1m seen in the previous year’s accounts.

Of that £546,000, over £320,000 was owed to the government via corporation tax and PAYE. A further £150,000 was owed to trade creditors, again around half of the previous year.

The accounts show that Lathams of Broughton was a subsidiary of Lathams (UK) Limited – and in the most recent accounts Lathams of Broughton paid a dividend of £380,000 to Lathams UK (Ltd). Lathams of Broughton Ltd owes no money to Lathams (UK) Ltd.

HMRC said it did not discuss individual or corporate cases due to confidentiality rules, but a spokesperson said: “We take a supportive approach when dealing with customers who have tax debts, working with them to find the best possible solution based on their financial circumstances.”

According to The Gazette, the official publication of the company’s records, a virtual meeting of creditors has been called for 11.30am on August 23 to nominate a liquidator. She will be Annette Reeve of Beesley Corporate Recovery, based in Manchester.

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Additional reporting by Jamie Lopez