Asos suppliers are preparing to battle the struggling fast-fashion retailer over a near £100m VAT bill.
The retailer said in its annual report that its suppliers have “historically charged VAT on services which should possible have been charged without VAT”.
If Asos is found to have overclaimed on the tax, the retailer could be forced to repay the £90m to an unnamed overseas tax authority and reclaim the amount from its suppliers.
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The retailer said another solution could be to reach multi-party, non-cash agreements between the tax authority, the suppliers and itself.
However, it was unclear whether the 20% fee should or should not have been charged and was waiting for confirmation from the relevant tax authority.
Asos said that in either scenario the tax authority concerned had not suffered a loss of tax revenue as amounts claimed by the business had been “matched by payments made by suppliers”.
It is the latest blow to Asos’ supplier relationships after its credit insurers Allianz Trade and Atradius pulled back their cover amid concerns over the retailer’s finances.
The business plunged to a pre-tax loss of £296.7m in its year to 3 September, widening sharply from last year’s £31.9m loss
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