KPMG may be about to face legal action in the UK over claims that it was negligent in its tax accounting for Goals Soccer Centres, Britain’s biggest five-a-side football pitch operator. The Times reports that the accounting group has been warned by the board of Goals Soccer Centres that it may sue with regard to a misdeclaration of value added tax (VAT) liabilities. The company runs 46 sites in the UK and four in California.
In March this year the company revealed historical accounting errors and policies that had resulted in a substantial misdeclaration of VAT, going back over several years. The value of the misdeclaration was estimated at around £12m ($15m). Goals Soccer Centres also warned that the VAT accounting policies it intends to adopt may have an impact on profitability going forward.
The company said this ‘may lead to a material change in its overall financial position and the company is currently unable to provide clarity to the extent of that impact without the receipt of further information’. The shares were suspended from trading on AIM.
In May the board confirmed that it expected 2018 full year results to be materially below expectations and historically reported financial performance. It also confirmed that ‘following extensive forecasting work on the financial year ending 31 December 2019, in which a number of new accounting policies, corrected accounting treatments and revised VAT assumptions have been adopted, it expects the financial year ending 31 December 2019 also to be materially below prior expectations and historically reported financial performance’.
The company has appointed forensic accountants, alongside its auditors, to investigate and is in active dialogue with HMRC.
