By guest editor Elias Jahshan from Retail Gazette
- Mike Ashley’s Frasers Group resolves €674m (£578m) dispute with the Belgian tax authority
- Settlement was made now due to the uncertainty posed by the coronavirus pandemic
- Frasers Group also revealed it was not eligible for the Bank of England’s Covid Corporate Financing Facility
Mike Ashley’s Frasers Group has said it has finally resolved a EUR 674 million dispute with the Belgian tax authority.
The company confirmed it had agreed to pay “an immaterial amount” to the Belgian Tax Authority, which equated to GBP 578 million in today’s exchange rates.
It said it took the “decision to settle these matters now given the uncertainty” affecting the company’s finances and suppliers’ credit insurance.
It added that the majority of new credit insurance cover has been withdrawn for the time being due to the store closures brought about by the coronavirus lockdown.
The news comes after Frasers Group – then known as Sports Direct International – revealed the tax bill amidst its full-year report published last July.
The surprise tax bill was one of the reasons why Frasers Group’s full-year report was controversially delayed and prompted auditor Grant Thornton to resign.
Frasers Group said it has now “successfully resolved” the tax bill, “together with a number of other historic tax matters” with the Belgian Tax Authority, although it insisted the deal meant it would pay out “no material sums of tax or penalties”.
Meanwhile, the Sports Direct and House of Fraser parent company also told shareholders that the firm was not “accepted as eligible” for the Bank of England’s Covid Corporate Financing Facility (CCFF).
“Frasers Group has now successfully resolved all remaining matters referred to in the ‘proces-verbal’, together with a number of other historic tax matters, by reaching a commercial settlement with the Belgium Tax Authority,” Frasers Group said in a statement.
“No material sums of tax or penalties are due to be paid in Belgium by Frasers Group as a result of the settlement.
“Frasers Group has taken the commercial decision to settle these matters now given the uncertainty affecting Frasers Group’s banking lines and its suppliers’ credit insurance where, due to store closures as a result of the current Covid-19 crisis, Frasers Group understands the majority of new credit insurance cover has been withdrawn for the time being.”