Comet Closes Today, Leaves £50m Bill For Government

The remainder of Comet’s branches are to close today, leaving a £50 million bill for the UK government (and thus, the tax payer) to pick up – mostly unpaid tax and redundancy costs for the 6,600 staff rather suddenly left jobless at Christmas.

The company reported losses of £200m at the start of last month, with £30m of those in the last five months. It’s now in administration, with Deloitte taking up the responsibility of sorting out what little money is due to whom.

There was £80m worth of assets to divide up, with the backers of the company (Hailey Acquisitions Limited) getting back around £50m of the £145m they were still owed from their investments. HAL bought Comet for £2 just over a year ago.

The staff will get just over £2m of holiday and outstanding pay.

Whilst some suppliers will get their stock back (due to the retention of title process we saw happen with Sony and GAME) any customers still awaiting goods, landlords, HMRC and customs will get nothing. There’s over £26m in tax unpaid.

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22 Comments

  1. Wait, am I being seriously stupid here? I know that the money for pay etc will not be split evenly, more will go to the higher ups no doubt.

    But saying that, £2 mil between 6600 people (if everyone was on a keel, would be a whopping…. £330. Has my basic maths completely failed me? That doesn’t strike me as being much. Maybe it’s the norm, but it seems such a small amount.

    • Ahhhhh *even keel)

    • £2m of holiday and outstanding pay, i.e. what they’re already owed, It doesn’t sound like this includes redundancy pay which the government is lumbered with.

      • Ah so I was being stupid. Not for my maths, but for not reading the report properly :/

      • @jeccross Everyone pays NI for this eventuality. If you get made redundant and no package is available then the DWP will give you your average weekly wage per week for each year you worked for that company.

        For example, if my employer goes under I’d get 9 weeks @ circa £200. 9 weeks = 9 years.

      • NI is more to cover the basic state pension that for this. It doesn’t even really cover that.

        The balance is still going to fall on the taxpayer and draw money away from other budgets.

      • Well, yes, NI and Income Tax all go into the same pot. But the former employees still paid into it. So the balance falls on them as well as every other tax payer.

  2. I wonder how well Currys are doing.

    • Currys, no worries.

    • Currys – part of DSG – is doing well. The changed with the consumer environment merging Currys and PC World while moving Dixons to an online only clearing store.

      • Yeh, I assumed, their prices are alot competitive and they price match. Not to mention, they have much much more choice of items.

  3. That is a shame but how will the Government reclaim the unpaid tax? In fact, how did they even allow Comet to get away with unpaid tax in the first place? They should have intervened before the start of their troubles. Suspect most of the cash will be going to the people who ran the company into the ground. Why do we always reward failure in this country? :( Suspect HMV will be the next high street name to go. :S

    • It’s my understanding that it isn’t the government that needs to intervene. It’s the HMRC. And they very rarely do. until it’s too late. Just look at the recent case with Rangers FC.

      • But if you owe them 1p, they will come down very hard on you and give you very little time. Instead of doing that to companies that avoid paying tax untill the public forces them to. >:(

      • Totally agree. Big companies get away with an awful lot compared to the individuals or smaller scaled companies.

      • And yet, it’s us that get treated like crap if we owe them a single penny. Because alllowing companies to not pay tax won’t harm our ecomony or cost us a lot of cash. Oh wait…

    • The Government are trying to bring in a law to make sure HMRC gets their debt paid first.

    • You read the Daily Mail, right?

      • Nope, i flat out refuse to read those rags as it’s usually baised or blaming something for something or racists or full of rubbish.

  4. So let me get this right from the comment made

    “There was £80m worth of assets to divide up, with the backers of the company (Hailey Acquisitions Limited) getting back around £50m of the £145m they were still owed from their investments. HAL bought Comet for £2 just over a year ago.”

    So they get back £50m, why ? why should they get any money back ? they failed with their investment and should get nothing. That money should be used to pay what is needed for redundancy, wages e.t.c not for the taxpayer to pick up.

    Yet again big business fails but keeps money from the failure, small business fails and they get nothing and usually lose their home and everything else they gambled to make a go of it not to forget their reputation, yet no doubt HAL will be doing the same again in a few months time and not paying tax on that venture either.

    All I seem to do nowadays is shake my head in disbelief at the goings on in this world.

    • HAL bought Comet for £2 plus honouring the companies debts. Debts which they met the payment arrangements on but the company still traded at a loss so had to close it.

      As for not paying tax on the venture, you don’t pay tax on a business that isn’t making profit which the exception of VAT. That VAT is paid by Comet and not HAL, Comet went under so any VAT owed will not be paid.

  5. It’s a sad loss to the highstreet but ultimately the failure to keep up cost Comet dearly. If you want to blame anyone, blame Comet. Thankfully HAL keep these people’s jobs going til Christmas.

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