Arran Aromatics in bid for cash to fight off the taxman

Published on Friday 30 January 2009 20:54

ARRAN Aromatics was last night searching for fresh investment to guarantee its long-term future after facing a court petition from HM Revenue & Customs (HMRC) over a tax bill.

The family-run business – which makes a range of up-market soaps and candles – had faced a petition at Kilmarnock Sheriff Court from HMRC, calling for the company to be wound-up.

But it is understood that the company has been granted a two-week extension by HMRC to give it time to pay the bill, which is reportedly 180,000.

Now the firm is seeking to secure new investment, with help from government agencies.

Arran Aromatics, which was formed in 1988, employs 95 staff, including 66 on the island.

The company is believed to have been badly hit by the loss of a 75,000-a-month order from a hotel customer. However, its business was boosted last April, when it signed distribution deals with two leading American fashion chains.

The deals with Fred Segal – a boutique popular with celebrities including Kate Moss – and American Rag, a luxury chain with stores in San Francisco and Los Angeles, are part of a wider expansion strategy.

The company is also believed to have recently secured major contracts with British Airways, P&O cruise ships and , the shopping channel QVC.

Arran Aromatics yesterday did not return calls.

But Kenneth Gibson, MSP for the Cunninghame North constituency, which includes the island of Arran, told The Scotsman: "I believe the worst is now past but the company is not yet out of the woods."

He said Alastair Rennick, Arran Aromatic's managing director, was working with Jim Mather, the enterprise minister, and UK and Scottish Government agencies to assist the company.

Gibson added: "The current window of opportunity gives the company a chance to attract additional new investment and ensure long-term survival and growth. Once short-term difficulties have been addressed, the new contracts recently secured should ensure Arran Aromatics has a stable and prosperous future."

Arran Aromatics was founded by Iain and Janet Russell, with their sons Andrew and Duncan, at Home Farm on the island.

The company now produces a range of about 250 products across six ranges, including shower gels, bath oils, hand cream and lip balms.

A range of 147 candles is also made on the island.

Arran Aromatics' factory and shop are a well-known tourist attraction on the island.

A spokesman for HMRC said he could not comment on specific cases.

Figures released earlier this month by HMRC showed that 1,125 businesses had been able to delay paying a total of more than 17 million of tax after contacting HMRC's business payment support service.

The "Time To Pay" service – which was launched by Chancellor Alistair Darling in his Pre-Budget Report – gives businesses the chance to negotiate with HMRC over payment timetables for pay-as-you-earn income tax, national insurance contributions and value added tax.