Northampton Town loan firm received £900k in VAT repayments
- Published
A company under investigation over missing public money intended for a football stadium redevelopment received almost £1m in VAT repayments, the BBC has learned.
1st Land Ltd, set up to redevelop Northampton Town's Sixfields stadium, had been passed £7.25m of a £10.25m loan from Northampton Borough Council.
The redevelopment remains unfinished and 1st Land is in liquidation.
Owner Howard Grossman said the VAT repayments were "all legitimate".
Mr Grossman did not elaborate on how 1st Land qualified for the repayments, but said they were all "in accordance with HMRC (Her Majesty's Revenue and Customs) rules".
Northampton Town was lent the money in 2013 and 2014 and the initial plan was to refurbish parts of Sixfields and land adjacent to the ground - including a new stand, hotel and conference centre.
None of the work was completed and a criminal inquiry is under way into "alleged financial irregularities" surrounding the loan.
Subsequently, the VAT repayments to 1st Land Ltd have emerged.
Unpaid invoices
When a firm has charged customers less VAT than the tax paid out on purchases of goods or services, HMRC will repay the difference.
Bank account statements seen by the BBC show 1st Land received six VAT repayments from HMRC worth £943,579 in the 15 months before it went into administration in January 2015.
However, a list of supplier payments made by 1st Land that year and in 2013, which were also obtained by the BBC, indicates expenditure totalling £2.3m.
Among those payments were two invoices totalling almost £69,000 submitted by the main contractor on the stadium project, Buckingham Group, in 2014, however the VAT components of these invoices weren't paid.
Three other invoices submitted by Buckingham Group in August and September that year, totalling £1.75m including VAT, remain wholly unpaid.
According to Monty Jivraj, a tax expert at Neumans LLP, HMRC would have looked at 1st Land's paperwork prior to making the repayments.
"If a company was to file a VAT repayment claim of, let's say £900,000 or £1m, HMRC would have a legal obligation to send VAT compliance officers to check the documents, such as invoices, VAT accounts and bank statements to check whether the company is legally entitled," he said.
HMRC said it could not comment about the affairs of individual companies.
Last week, Northampton Borough Council apologised after an audit, external report from PricewaterhouseCoopers (PwC) identified a string of failures surrounding the way the loan was approved.
Loans and repayments
Amount of Northampton Borough Council loan to Northampton Town FC forwarded to 1st Land Ltd (Dec 2013-July 2014): £7.25m
HMRC VAT repayments to 1st Land Ltd (Feb-Sept 2014): £943,579
Amount remaining in 1st Land's bank accounts, Jan 2015: Barclays -£1,019; Lloyds £41.15
Amount owed to biggest creditor, Buckingham Group Contracting: £2.07m
- Published20 September 2016