Why Sopwith failed after the First World War

Why did the First World War bankrupt the Sopwith company?

An excess-profits tax claim arrived at a damaging time, with losses unavailable to offset it and the Treasury rejecting Sopwith's explanation of its wartime subcontracting costs.

Sopwith's excess-profits tax bill arrived at a particularly damaging time for aircraft manufacturers. The company could not immediately set its losses against the claim. Its defence was that urgent wartime orders had forced it to pay heavily for subcontracted work, but the Treasury rejected that explanation. Many wartime aircraft firms disappeared or survived within larger engineering groups, with Vickers' acquisition of Supermarine providing another example.