Beleagured sports retailer JJB Sports has insisted today that “customers have not been duped” by a tax error that led to some product ranges being given an incorrect tax code.
A spokesperson for the company told Retail Gazette that the error was found upon the arrival of current Finance Director David Williams, who joined the retailer in January last year and undertook a full review of accounts.
This uncovered that some borderline items, such as clothing ranges for teenagers, had been incorrectly labelled in its back office systems as tax exempt and the retailer said that it contacted HM Revenue & Customs (HMRC) to flag up the error, which is said to have cost millions of pounds.
JJB added that reports today suggesting that the retailer knew of the mistake for a year prior to notifying the HMRC were “simply not true”, adding that the HMRC‘s provision related to an error from June and July 2011.
Last week the sports specialist, which announced at the end of last month that it is up for sale following disappointing trading, announced that “a number of parties” have expressed interest in acquiring the whole or a substantial part of the business and its assets as it seeks to secure its future on the high street.
Rival Sports Direct, which recently announced a group sales rise of 25.3 per cent in its last quarter, is said to be interested in a deal, which would likely involve the company entering partial administration and closing a number of its UK stores.
Nonetheless, JJB is keen to maintain focus on its customer service and emphasised that no levy or fine was imposed by the HMRC as a result of its tax error.
A spokesman for JJB Sports commented: “The HMRC provision relates to an error at the group level accounts.
“As such there was absolutely no impact on customers or the prices they paid for products whatsoever. The matter has been resolved satisfactorily and fully with HMRC.”