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COLERAINE businesses have accused the VAT office in Northern Ireland of forcing firms into bankruptcy and their workers onto the dole queue, the Times can reveal.

The charge against HMRC comes as unemployment nationwide rises to 2.5 million and above the 60,000 mark here in Northern Ireland.

Against this backdrop, long standing firms struggling to pay hefty VAT bills at the new 20% rate are being told by debt enforcement officers that they favour closure to accepting repayment plans.

A number of local businessmen in the borough spoke anonymously to this newspaper as pressure grows on their companies to close their doors and accept bankruptcy.

One businessman from the group, which collectively employs hundreds of local workers, described his situation as”dire”.

Speaking hours after the release of the latest jobless figures, the local entrepreneur said he was desperate to remain open but was being threatened with unrealistic demands for vat payments.

“There is no negotiating with them,” he said. “It’s just a case of pay these thousands by the end of the month or we bring bankruptcy proceedings against you.”

Another of the local business owners, who is in manufacturing, said he felt enforcement officers were unaware of the long term damage they were doing to the economy.

“It’s not just the future VAT payments the government will lose if I close but also all the tax from my employees and my suppliers. If they force me out of business its the knock on effect it will have on other businesses where I and my workers are spending our money each week.”

The third businessman in the group said HMRC also appeared oblivious to the human cost of their actions.

“They seem to operate with impunity - the courts won’t help us and even our local MLAs cannot reason with them,” said a third businessman. “One hundred and fifty SMEs are closing every day and some of those are because the owners are driven to suicide,” he said.

Revealing that he was told “off the record” to declare himself bankrupt he added: “What I don’t understand is why they think putting people out of work and losing all of the VAT owed to them is preferable to making a reduced or delayed payment schedule, I don’t know. That would be the sensible thing to do.

“It would secure the company’s future and keep us from adding to the growing unemployment numbers,” he said.

We asked HMRC Belfast to comment on the businessmen’s claims, however, at the time of going to press, no reply was forthcoming.