Sports Direct parent resolves bulk of half-billion pound Belgian tax bill
Sports Direct parent Frasers Group says it has resolved most of a 674-million euro Belgian tax bill
Sports Direct parent Frasers Group has resolved most of an outstanding tax bill of around half a billion pounds with the Belgian tax authorities.
The discount sportswear company, owned by billionaire Mike Ashley, reported in July the Belgian tax authorities had demanded €674m (£568m, $743m) in unpaid VAT following a routine audit. At the time, Sports Direct said its auditor, PricewaterhouseCoopers (PwC) in Belgium, had detected some clerical reporting errors, but no evidence of material underpayment of VAT.
On Thursday, Frasers Group said the bulk of the bill had been resolved with the Belgian authorities. “Matter 1 accounts for €491m (or 73 per cent) of the total €674m referred to in the "proces verbal". The Tax Authority has now confirmed in writing that it has completed its review of Matter 1 and that it is satisfied with the explanation provided,” the company said in a statement.
“Frasers Group management still believe that it is less than probable that material VAT and penalties will be due in Belgium as a result of the tax audit,” it added.
Separately, Frasers Group finance chief Chris Wootton said the company had been working closely with the Belgian tax authorities and its own advisors to resolve the unpaid bill.
“This was a huge undertaking for all parties involved. Our view at the time was that this VAT bill was without merit so I am delighted we have so far been vindicated in that view with the extinguishment of the main part of the proces-verbal,” Wootton was quoted by CityAM as saying.
Just prior to rebranding as Fraser Group, Sports Direct in December reported a 160-per cent increase in pre-tax profits in its half-year results ending October 27 2019. Pre-tax profit rose to 193.4 million pounds from 74.4 million pounds in the same period the previous year.