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British taxpayer to foot £50m tax bill following Comet catastrophe

BusinessNews
, 17 Dec 2012News
British taxpayer to foot £50m tax bill following Comet catastrophe

Comet’s collapse has racked up a cumulative £50 million in unpaid tax and redundancy costs, with some 6,600 employees expected to be left without a job when the consumer goods vendor closes its doors for the final time tomorrow, 18 December.

HM Revenue & Customs is set to lose out on some £26 million in back VAT and payroll taxes, as all ‘unsecured’ creditors will get nothing from the administration process. Other unsecured creditors include search giant Google and leading UK television network ITV, while the nearly £5 million worth of unclaimed gift cards and vouchers currently thought to be in circulation will also be valueless.

However, the one-time retailer's primary backer, Hailer Acquisitions Limited (HAL), is set to recover £50 million of the estimated £145 million it is owed, meaning it will receive over 60 per cent of Comet's remaining assets of around £80 million as being divided up by administrator Deloitte.

In addition to taking the fiscal hit, the Government has agreed to subsidise Comet’s redundancy payouts to the tune of £24 million, while holiday and other back pay owed to staff adds another £2.1 million to the bill. The overriding fear is that it is the British public who will ultimately foot the bill for the failed retail enterprise.

The former 236 branch chain is reported to have incurred losses of some £200 million before it began closing down in November.

Image Credit: Flickr (Jim Linwood)

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