NEWS

Bigjigs Toys sees profits halved after failed tax relief schemes

Published on: 17th March 2016

Turnover increases but pre-tax profits fall to £194,000 from £427,000.

bigjigs480According to Kent Business magazine, Bigjigs Toys suffered an overall loss on the year of £101,000, having made a profit of £288,000 in 2014, after the company was forced to pay a £295,000 tax bill as a result of having made significant payments into failed tax mitigation schemes.

Turnover increased from £7.3m to £8.1m, with international sales said to be spearheading the growth. Gross profit increased slightly to £1.96m, while margin slipped from 26.2% to 24.1%, and earnings before interest, tax and other charges fell from £502,000 to £319,000.

Sam Ireland, operations manager at Bigjigs Toys, commented: “In 2009 we sought financial advice from FSA accredited independent financial advisors to help fund the continued rapid growth of the business. That advice, in hindsight, we should not have taken. The person who advised us is now the subject of an ongoing Financial Ombudsman investigation.

On moving to a new firm of accountants, and after a thorough review it came to light that what we had been advised previously was inconsistent with current tax regulations. At this point we took the decision to appoint a firm of tax specialists to pull the information together about what had happened. Two and a half years ago we voluntarily sought a meeting with HMRC to explain the situation we found ourselves in and to work with them to resolve that situation to their satisfaction.

The results of that resolution form part of our statutory accounts filling for the last financial year.”

 

 

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