// Mike Ashley’s Frasers Group has correctly paid tax in Belgium that was questioned by authorities there
// Frasers Group says Belgian Tax Authority is satisfied with its explanation regarding the tax bill
// The company formerly known as Sports Direct had been investigated over the sum equivalent to £570m
Frasers Group has said it was now in the clear with Belgian authorities over an alleged failure to pay a tax bill that equated to around £571 million.
The Mike Ashley-owned company, which was renamed from Sports Direct International in December, first revealed it was being pursued by Belgian authorities over a €674 million tax bill amidst its full-year report published last July.
At the time, firm said Belgian authorities were “requesting further information in relation to, amongst other things, the tax treatment of goods being moved intra-group throughout the EU via Belgium”.
READ MORE:
- New “landmark” Frasers store to open at Meadowhall Sheffield
- Mike Ashley’s Frasers Group urges business rates reform in letter to PM
- Sports Direct shrugs off Belgian tax bill as it posts 22% sales rise
The surprise tax bill was one of the reasons why Frasers Group’s full-year report was controversially delayed.
The company’s auditor Grant Thornton also resigned in the wake of the news.
However, Frasers Group said today that correctly paid tax in Belgium, and that Belgian tax authorities had confirmed in writing that it was satisfied with its explanation regarding €491 million – or 73 per cent – of the total €674 million in question.
Frasers Group added that issue “has been resolved with no payment of VAT liabilities or associated penalties and interest to be made by the company or any member of its group”.
Mike Ashley’s retail company, which operates Sports Direct, Jack Wills, Evans Cycles and House of Fraser, said the confusion had been down to “clerical reporting errors” over the reclaiming of VAT.
EU reverse charge rules dictated that VAT should “neither have been paid by the UK entity or reclaimed by the Belgian entity”, Frasers Group said.
“Frasers Group and its advisers will continue to fully engage and work with the Belgian Tax Authority in order to resolve the smaller remaining matters referred to in the proces verbal as soon as possible,” 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.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
