A deal to save the West Mid Show from financial ruin came within moments of being struck until a VAT bill was uncovered which scuppered any rescue plan, it emerged today.

Neale Sadler, chairman of The Shropshire & West Midlands Agricultural Society Council, said the five main creditors agreed to a payment plan which would have given officials more time to pay back a £60,000 debt.

He said they were willing to take 20 per cent off the money owed to them per year for the next five years with the first payment not due until August next year.

Mr Sadler said the society believed it was in line for VAT rebates of £42,000.

But he said specialist accountants had looked through the financial records and had actually found that instead of being owed money, the society could have to pay an additional £13,000.

Mr Sadler said the advice over the potential bill to Revenue and Customs meant the society, which owes up to £160,000 to about 50 creditors, was no longer viable and should be placed into voluntary liquidation.

He said: “Initially the deal would have been enough to save the show. It involved the five biggest creditors and I think it totalled about £60,000.

“It would have worked but then we got a VAT claim looked at by the accountants. They interpreted the rules differently to previous advice so that whereas we thought we had a debtor in Revenue and Customs we actually may have needed to find an additional £13,000.”

Mr Sadler said the society was also dealt an additional blow after Revenue and Customs said a £26,000 historical claim was on hold.

He said: “It was the straw that broke the camel’s back.”