Sports Direct chairman Keith Hellawell tried to rosy up the company’s beleaguered financial report by claiming it has contributed £1.8 billion in taxation to the UK economy – even though £1.3 billion was paid in VAT by customers.
Mike Ashley’s high street brand blamed “currency headwinds” for a big drop in underlying pre-tax profits in its last financial year.
It reported trading earnings of £113.7 million over the 12 months to 30 April – down 59 per cent on the previous year – also hit by what it called “strategic challenges” in its operations on the continent.
The retailer accused the media of an “extreme campaign” against it, turning shoppers away amid outrage over controversial working practices at its warehouse which have been compared to Victorian workhouses.
In an attempt to win the public’s support back chairman Hellawell included a long plea in the finishing statements of the financial report, pointing to the number of jobs they have created and how much money they have sent to the treasurer’s coffers.
But inhumane working conditions aside, the company’s claim to be contributing billions of pounds could be misguided.
Several people took to Twitter in the immediate aftermath of the claims pointing out that the firm paid most of their tax revenue in consumer-generated VAT receipts.
Leaving a measly 500m in direct tax, which is a pittance of the multi-billion pounds worth of revenue the company has received.
Sports Direct was scrutinised over its offshore links during the Panama Papers saga after it emerged that part of the retail empire was connected to a business in Central America.
The Panamanian company, which helped fund Sports Direct’s joint venture in Iceland, is also owned by the family of disgraced Icelandic businessman Jon Asgeir Johannesson, who was dubbed the Viking Raider over fraud allegations relating to the dramatic implosion of Iceland’s financial system and his tax-evasion exploits ever since.
Bit cheeky of @SportsDirectUK to include £1.3b in VAT paid by customers into that £1.8b “contributes to the UK economy” ?
— Andrew Rummer (@AJRummer) July 20, 2017
Since you are here
Since you are here, we wanted to ask for your help.
Journalism in Britain is under threat. The government is becoming increasingly authoritarian and our media is run by a handful of billionaires, most of whom reside overseas and all of them have strong political allegiances and financial motivations.
Our mission is to hold the powerful to account. It is vital that free media is allowed to exist to expose hypocrisy, corruption, wrongdoing and abuse of power. But we can't do it without you.
If you can afford to contribute a small donation to the site it will help us to continue our work in the best interests of the public. We only ask you to donate what you can afford, with an option to cancel your subscription at any point.
To donate or subscribe to The London Economic, click here.
The TLE shop is also now open, with all profits going to supporting our work.
The shop can be found here.
You can also SUBSCRIBE TO OUR NEWSLETTER .
