Goals says £12m VAT hole may be ‘materially higher’

Troubled East Kilbride-based Goals Soccer Centres plc said on Monday the £12 million hole in its accounts could be “materially higher.”

The announcement came as the firm was de-listed from the stock exchange after the accounting issues relating to VAT could not be resolved before Monday’s deadline.

The full stock exchange statement fro Goals read: “Goals today provides an update on corporate matters within the company:

“The company continues to work with its advisors in relation to resolving any misdeclaration of VAT, and in establishing a final value of money owed to HMRC.

“The company has historically stated that it believes the potential misdeclaration of VAT to be £12m, excluding interest and penalties.

“Due to the identification of improper behaviour on the part of a small number of individuals historically within the company, as announced on 2 August 2019, the company has not been able to conclude its work to date on clarifying the potential liability associated with the misdeclaration.

“Further, the actual liability may be materially higher than that previously announced dependent on the approach and working assumptions that could be adopted by HMRC in assessing the misdeclaration.   

“Finalisation of the amount of the liability will ultimately require agreement with HMRC or determination by a competent tribunal. 

“The company confirms that there have been no material developments in the ongoing dialogue with HMRC. 

“The company announced on 2 August 2019, that it was unable to publish by 30 September 2019, the full year 2018 audited financial statements.

“The company continues to work on preparing audited financial statements, but no definitive timetable has as yet been established regarding the completion of this work., due to the issues faced by the company and the complexities surrounding the preparation of re-stated accounts.

“The key complexity revolves around the significant number and quantity of material correcting accounting entries required to enable full re-statement of the December 2016, 2017, & 2018 balance sheets. 

“This workstream requires significant resource and time due to the nature, quantum and time period covered by the accounting issues identified. 

“As the company is not able to quantify with any certainty the impact of the misdeclaration of VAT on its financial position, or establish a firm timetable in which it will be able to quantify and agree the misdeclaration with HMRC, the company continues to expect the listing of the company’s ordinary shares on AIM to cease, with a cancellation effective from 30 September.

“As announced on 29 August 2019, the company has commenced a process to invite offers for the business and assets of the company.

“Further, on 23 September 2019, the company announced it had received a preliminary and highly caveated possible cash offer from Sports Direct International plc at 5 pence per share.

“Neither of these processes will be affected by the cancellation of the listing of the company’s ordinary shares and will continue.

“The directors remain keen to provide further updates on the company as appropriate.

“To do this, the company intends, post-cancellation, to keep shareholders updated on developments within the company via its website (www. goalsplc.co.uk), and in writing. 

“In due course, and if appropriate, the directors will seek to establish an off-market trading facility which match trades in the ordinary shares between willing buyers and willing sellers, acting as a central point for negotiation between UK stockbrokers.”