New statements published this week (March 18) by the liquidators of Diamond DCO Two limited – the company formerly known as Lloydspharmacy – revealed that HM Revenue and Customs (HMRC) has billed the company £39,894,937 in locum payment tax.
Lloydspharmacy was the second largest multiple in the UK two years ago, before C+D exclusively revealed that the company had sold all its high street branches in November 2023.
Read more: Lloydspharmacy goes into liquidation with £293m owed to creditors
In January 2024, Lloydspharmacy went into liquidation with some £293m owed to creditors.
Now, the liquidators’ statement of receipts and payments made between January 2024 and January 2025 has revealed that it paid out £500,000 to previous Lloydspharmacy holding company Aurelius Crocodile – with an estimated £16m to paid out to it in total.
Read more: Lloydspharmacy confirms ‘successful sale’ of all community pharmacies
And it showed that the liquidators themselves were paid £290,000 over the year.
But further payments of cash owed to the old owners and “unsecured creditors” – including former employees – have been put at risk by HMRC’s locum enquiry.
“Direct impact” on payments
The liquidator had set aside just £1 to be realised for locum tax claims made by HMRC.
“HMRC raised enquiries in 2015 into the historic employment status of locum pharmacists” – “this is a large-scale enquiry that also affects other pharmacy operators, including the likes of Boots and ASDA,” the report said.
Liquidator Martin Armstrong said that he has “lodged an appeal” against the tax bill, adding that he estimated it would “take at least two years to conclude”.
Read more: Locum tax clawback leaves ‘most’ CCA multiples in dispute with HMRC
“But if they ultimately have a valid claim, I expect that I will be able to make a significant distribution to this category of creditor,” he said.
“The extent that HMRC’s preferential claim is valid will have a direct impact on the likelihood and quantum of any distributions made to Aurelius Crocodile Limited...and unsecured creditors,” he added.
“The prospect of a dividend to non-preferential unsecured creditors is wholly dependent on the outcome of the HMRC locum enquiry,” he stressed.
£2.6m in employment claims
The news comes as the report revealed that the liquidators have “received provisional [employment] claims from 86 tribunal claimants amounting to £2,625,000”.
It added that most claims brought by the 86 former employees “remain ongoing”.
Read more: ‘No realistic prospect’ of proper payout in Lloydspharmacy redundancy row
Other “non-preferential unsecured creditors” owed funds by the company include trade and expense creditors – from whom the liquidator said he had received 42 claims totalling £2,390,108.
And Armstrong added that he had also received claims from 28 landlords – also unsecured creditors – totalling £5,949,980.
The report also revealed that while the liquidators’ previous statement of affairs included £8,380,830 “owed to purchasers in relation to overpayments for stock and property indemnities that have been triggered under the respective asset or share sale agreements”, Armstrong had “not received any claims”.
“Charity” repayment
Meanwhile, the liquidators said that they had recouped some £13,637,764 in assets between January 2024 and 2025.
Among them were sums totalling £3,395.50 labelled “repayment plans — charity”.
Read more: Lloydspharmacy: 80 ex-Sainsbury’s pharmacists head to employment tribunal
The cash was “received into the company’s NatWest bank account after the appointment of joint liquidators in relation to charity repayment plans”, the report said.
“No further amounts are anticipated,” it added.
Lloyds latest
In December, the Pharmacists’ Defence Association (PDA) revealed that it was preparing to support around 80 former Sainsbury’s pharmacists who only received statutory redundancy payments after Lloydspharmacy made them redundant in a four-day employment tribunal.
In April, the body said that pharmacists involved in the legal dispute with Lloydspharmacy over their entitlement to enhanced redundancy benefits would have their case heard from March 17 2025.
Read more: Former owner bags £415m dividend from Lloydspharmacy and LloydsDirect sales
In February, the PDA revealed that Lloydspharmacy did not have business indemnity insurance in place that would have covered any successful compensation claims.
It estimated at the time that any successful tribunal award would “only be able to recover in the region of two pence for every £10 awarded”.
Read more: ‘A lot’ of ex-Lloydspharmacy branches facing ‘serious problems’, IPA warns
The PDA also launched a legal process on behalf of pharmacists formerly employed by Lloydspharmacy in September 2023 after some of its members reported “changes to working practices” following the sales of pharmacies in the Lloydspharmacy estate in which they work.
Meanwhile in April, a landlord owed nearly half-a-million pounds by Lloydspharmacy’s former holding company raised concerns about its liquidators’ “conflicts of interest”.
That month, Lloydspharmacy’s former owner Hallo Healthcare Group (HHG) paid out a £405m dividend to its shareholders after selling off the multiple – which was by then renamed to Diamond DCO Two Limited.
