LONDON (Alliance News) - Cello Group PLC said Monday that HM Revenue and Customs' review into one of its subsidiaries possibly not charging VAT on some items provided to its charity clients may now include a wider range of items than anticipated.
As a result, the potential liability arising from the review may now be more than the GBP1 million and GBP2 million maximum liability it had previously guided. However, it said that given professional advice it has received on the nature of the items concerned, it considers the likelihood of the increase in liability to be "remote".
Cello reiterated its plans to "robustly defend its historical position on the issue". Additionally, it said it has received professional advice that the broadening of the review is "not appropriate and directly contracts previous written guidance received by the group and the industry."
It maintains that any backdated VAT assessment would be "substantially contractually recoverable from clients."
Shares in Cello Group are trading down 3.3% at 88.00 pence Monday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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