Patisserie Valerie wants a rebate for corporation tax it paid on profits that may not have existed
Patisserie Valerie wants a rebate for corporation tax it paid on profits that may not have existed.
The stricken café chain, which crashed into administration on Tuesday following an accounting scandal, paid £16m to HM Revenue and Customs over the past five years.
But it is in talks with the taxman to get the money back after discovering its profits had been overstated.
In talks: The stricken café chain paid £16m to HM Revenue and Customs over the past five years
A rebate would be welcome as it could make the chain more attractive to potential buyers.
David Scott, a restaurateur who sold his Druckers business to Patisserie Valerie more than a decade ago, is said to be interested in buying part of the business.
The company’s parent Patisserie Holdings last year revealed it has almost £10m worth of debt on its books instead of £28m in cash shown before the alleged fraud was discovered.
HMRC declined to comment on Patisserie Valerie’s pleas for a tax rebate but said companies can claim overpayment relief in some circumstances.
But the firm faces fresh embarrassment after its chief executive described the crisis as ‘bittersweet’, despite crashing into administration with the loss of nearly 1,000 jobs with a further 2,000 still at risk.
Steve Francis, who was hired in November to turn around the café chain, told The Grocer: ‘It sounds bizarre but it’s genuinely a positive development. I would rather have 2,000 fully-employed staff than 3,000 with no future. We are executing the plan but we can do it much more quickly now.’ The 57-year-old replaced Paul May, who abruptly left the business in the wake of the scandal that has brought Patisserie Valerie to its knees.
But Francis was under fire last night as shareholder anger grew over the crisis. Investors are expected to be left with nothing from the ordeal.
Chairman Luke Johnson’s £166m stake is also likely to be worthless, but the 56-year-old has made £40m from share sales, dividends and pay since Patisserie Holdings listed five years ago.
Chris Boxall, co-founder of Fundamental Asset Management, who invested in Patisserie Holdings on behalf of clients, said: ‘Almost 1,000 people have lost their jobs, shareholders have lost hundreds of millions of pounds, I don’t see how you could put a positive slant on this especially as nothing is certain at the moment. He [Francis] is an absolute moron. He’s been selected by a chairman who is clearly of a similar groupthink.’
Labour MP Peter Kyle said the workforce, investors and customers have ‘all been put through hell and a little recognition of what the company has put these people through would go a long way’.
Patisserie Valerie declined to comment.