Failed car dealer Cazoo will pay a huge tax bill but it is still uncertain whether 10,000 unsecured creditors owed nearly £76m will get paid. According to a recent statement from Teneo, Cazoo's associated property company and its holding company, HMRC is likely to be paid £8m in full in the next two months. However, it is not yet known what will happen to the 9,500 unsecured claims – totalling £75.8m – that have so far been made to administrators.
Cazoo customers and suppliers are likely to form a large part of that number, which administrators warn could rise even higher. Customers will expect to be repaid for warranty claims and other issues with cars they bought from the failed car dealership following its collapse. Meanwhile, suppliers will be hoping their bills can be paid, Car Dealer Magazine reported.
While preferential claims by employees have already been settled in full, ordinary unsecured creditors will likely need to wait much longer. At the moment, administrators need to access £22.5 million in cash from Cazoo's main operating business and £23.7 million from its holding company.
However, additional £50 million is held in a restricted bank account controlled by secured creditor Glas Trust Corporation Limited, which acts on behalf of lenders and noteholders. Until the courts decide who gets paid first, the money is effectively frozen. Without access to these funds, it is feared the 'pot' for regular customers will be empty, leaving families with zero compensation.
Administrators have been paid nearly £5m for their work on the collapse.
In the report, they said: "The timing and quantum of any unsecured distribution remains uncertain and will depend on the outcome of the claim adjudications and final costs of the administration.
"There remain several outstanding matters which may significantly impact the final outcome for all creditors.
"As such, the final dividend payable to creditors may be outside of the estimates provided."
Cazoo was launched by Alex Chesterman, Love Film and Zoopla founder, in 2019 as an online-only used car sales business. It grew rapidly during the pandemic but racked up hundreds of millions of pounds in losses and never made a profit.
The Cazoo brand and online marketplace were sold to Motors for £5 million in June 2024, just a month after the business entered administration. The current trading business is unconnected to the administration of the former used car sales firm. The Cazoo administration is due to run until at least May 2026.
