Collapsed Wilko owed HMRC £25m

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Peninsula Team, Peninsula Team

(Last updated )

High street retailer Wilko had an outstanding tax bill totalling £25.75m when it went into administration in August.

HMRC was named as a secondary preferential creditor in administrator PwC’s initial insolvency report filed at Companies House, although whether it will receive much of the outstanding tax will depend on the outcome of the group’s selloff to various competitors such as Poundland and The Range.

In addition, when the retailer collapsed it owed £5.52m in unpaid wages to staff.

The Pensions Regulator has also launched an investigation into the £76m deficit in Wilko’s pension fund following the retailer’s collapse.

PwC has estimated the deficit in the defined benefit pension scheme is £76m on a ‘buy-out’ basis. There are understood to be at least 2,000 people in the scheme, many of whom have already retired as the fund was closed to new claimants years ago.

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In the 2022 annual report, Wilko warned that the company had a deficit in its pension scheme ‘which was driven by asset investments not generating sufficient returns to fund pension liability, volatility in markets and increasing running costs’.

In the run-up to Wilko’s administration, the high street chain paid millions in dividends to directors of the family-owned business, which brought in administrators at PwC putting 12,000 jobs at risk and threatening the closure of over 400 shops.

In the year leading up to the collapse of Wilko, £3m was paid out in dividends to the Wilkinson family, rounding off payouts of nearly £100m in the last decade. This was despite the company reporting a loss of £31.9m for year end January 2022. At the time it cited supply chain and logistics issues, labour shortages and changing retail patterns as particular risks for the business, and admitted that its loan facility renewal was seen as a going concern risk.

For information on redundancies, visit BrAInbox today where you can find answers to questions like How soon after making someone redundant can I hire for that role?

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