Lotus given seven days breathing space in HMRC insolvency proceedings

Lotus owes HMRC £900,000 in unpaid income tax and National Insurance

Lotus has been given seven days breathing space in insolvency proceedings brought by Revenue and Customs (HMRC).

The Formula 1 team, based in Enstone, Oxfordshire, is facing administration over a £900,000 unpaid tax bill.

Mr Justice Birss, at London's High Court, said he would allow time for a deal to be signed that could provide "significant funding" to the company.

But he added, it would be the last time he would grant an adjournment.

Earlier lawyers for HMRC told the judge that a further delay in the case, which has been adjourned once already, was not appropriate.

But Lotus, which is reported to be in takeover talks with former owner Renault, argued if the administration order was made immediately the company would cease to trade and it would cost 400 jobs.

The judge said: "The parties have satisfied me that that there is genuinely a real prospect that the first stage of the deal that is being described will be signed in the next seven days, which will allow significant funding to go into the company."

HMRC brought the case because of unpaid income tax and National Insurance for June 2015.

Since then, while negotiations have been continuing to save the team, a similar debt had accrued for July with another due shortly for August.