Bed bank and online travel retailer On Holiday Group Limited has ceased trading and entered administration, putting 65 jobs at risk.
The company has debts of approximately £7m and had previously seen subsidiary OHG Accommodations Limited also enter administration following a dispute with HRMC over £4.5m of Toms (Tour operated margin scheme) VAT.
The accommodation wholesale firm acted as a middleman between hotels and travel agent, and had forward bookings worth £19m.
Administrators for the company have yet to be confirmed.
In a statement, On Holiday Group claimed it held “lengthy discussions with most of the major bed banks”, although “only one bed bank was willing to complete a deal to help their travel agency partners.”
“Unfortunately, this deal floundered last night, because of deliberate and inaccurate leaks to the Spanish press along with legal complexities relating to the client account.”
On Holiday Group CEO Steve Endacott said: “The timing of the Supreme Court ruling in favour of Medhotels could not be more ironic and maddening.
“We are obviously glad that it gives a virtually guaranteed £4.5m pay out to our hotel partners, however it is likely that this will take a further 6-9 months to secure from HMRC and we have had legal advice that we cannot trade until this point, without going into administration.
“We have been forced to take the decision to put the company into administration due to pressure from hoteliers to make payments, which OHGA cannot do without the return of the £4.5m held by HMRC.
“Not surprisingly our hotel partners are not willing to wait up to another 9 months to receive payment. Obviously, I am absolutely gutted and deeply sorry to put 65 staff at risk today.”