Frasers Group has announced it is in the clear with Belgian authorities over an outstanding tax bill that equated to £571m.
Belgian authorities had been looking into a number of matters with the group, including ‘Matter 1’, which accounted for 73% of the total £571m owed.
In its latest update, the retail group said that the Belgian 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 Mike Ashley-owned group first revealed that Belgian authorities were pursuing the tax bill in its full-year report last July. In a December update, the group announced that the tax authority “expected to complete its review of ‘Matter 1’ early this year”.
The group said VAT has also been “correctly accounted” for in Belgium, and ‘Matter 1’ has now been completely withdrawn from the “proces verbal” by the Belgian Tax Authority. It added there was “no payment of VAT liabilities or associated penalties and interest to be made by the company”.
Frasers Group revealed that initial confusion over the tax bill arose from “clerical reporting errors”, which included paying VAT on goods shipped to a Frasers Group Belgian entity. EU reverse charge rules meant that VAT should “neither have been paid by the UK entity or reclaimed by the Belgian entity”.
In a statement, the 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 process verbal as soon as possible.
“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.”