THE city’s only strip club is under new ownership, after the company that ran the venue entered administration over an unpaid tax bill.

Black Cherry, in Lowesmoor, Worcester, was not paying VAT on money that it held for dancers from card machine payments.

HMRC advised the strip club that it needed to treat the payments as company turnover, in an inspection in 2016.

Black Cherry Entertainment Limited, run by Ashvin Patel, owed HMRC £85,488.87 in 2017, according to a document on the Companies House website.

It also shows that the business and its assets were sold to Black Cherry Gentleman’s Club Limited, which is owned by David Barrett, for £10,000 in August 2017.

Mr Barrett has now applied to renew the strip club’s sex establishment licence and for the licence to be in his name.

A statement of administrator’s proposal for Black Cherry Entertainment Limited sheds light on the financial problems at the venue.

It states: “The dancers were all self-employed and paid the company a small fee based on the number of dances they performed and payments received from clients over the course of the evening.

“In 2016, HMRC conducted a routine VAT inspection and advised that all payments held for the dancers and that were processed via the company’s card machines should be treated as turnover of the company, even if the whole of the sum was held on trust for the dancers.

“As a result, this created an unexpected VAT liability. Some payments were advanced by the director but these were used to pay other creditors whilst a full financial review took place.

“The review determined that the company could not afford to take on the burden of a substantial loan from anyone and the director demanded repayment of the sums he had advanced.

“The company was unable to repay the loan advanced by the director and the company was placed into administration on 7 August 2017.”

Black Cherry Entertainment Limited officially dissolved on November 18, according to Companies House.

A consultation over Mr Barrett’s application to renew the venue’s licence - and transfer it to him - closes on November 29.

Law firm Harrison Clark Rickerbys, which was listed in Mr Barrett’s licence application and previously represented Mr Patel, declined to comment.

A Worcester City Council spokesman said: “The city council has received an application for the annual renewal of the sex establishment licence held at Black Cherry.

“We have also received an application for the transfer of the licence from Black Cherry Gentlemen’s Club Limited to David Barrett.

“These applications are currently being processed. The applicant is responsible for placing public notices about the applications at the premises and in the local press.”