Homebase’s £5m tax rebate delay has been revealed as 74 stores go up for sale, as reported by Wales Online. The DIY and garden chain Homebase was awaiting approximately £5 million in tax rebates before entering administration last week. This development comes as the troubled firm has set a deadline for potential buyers to acquire its remaining stores in the UK and Ireland by the end of next week.
The collapse of Homebase was attributed to the challenging conditions faced by the DIY sector over the past three years. The company appointed administrators at consultancy Teneo, who managed to secure a deal with retail group CDS, the owners of The Range and Wilko. This deal safeguarded the future of around 1,600 jobs and 70 stores. However, the fate of 2,000 other employees and the remaining Homebase stores remains uncertain.
Administrators have now put 74 leasehold Homebase stores on the market as part of efforts to generate additional funds for creditors. These stores are scheduled to be sold by November 29. The collapse of Homebase was exacerbated by reports that Wells Fargo, the banking giant, declined to extend the company’s lending facility due to financial concerns.
Altus Group, a commercial real estate adviser representing Homebase, disclosed that over 50 checks, challenges, and appeals regarding the retailer’s property tax liabilities were unresolved at the time of its collapse. The company was seeking a reduction in the overall rateable value of its store portfolio by £5.7 million following a 2023 revaluation of its annual business rates bill. Had these matters been addressed before the collapse, it could have led to tax rebates amounting to about £5 million for the financial years 2023/24 and 2024/25.
Alex Probyn, the president of property tax at Altus Group, expressed concerns about the slow appeal process, which he deemed damaging to cash flow. Probyn highlighted the need for a swift correction of the 2023 tax base to ensure timely issuance of rebates and to instil confidence in the fairness of tax bills for ratepayers.
Various properties across different locations have been placed on the market for sale. These include stores in areas such as Altrincham Retail Park in Manchester, Basingstoke in Hampshire, and Glasgow in Scotland, among others. Homebase and Teneo have been approached for comments on the recent developments.
In conclusion, the delay in tax rebates amounting to £5 million has shed light on the financial challenges faced by Homebase, leading to its administration. As the company works towards selling its remaining stores, there is a focus on securing funds for creditors and ensuring the future of affected employees. The situation underscores the complexities within the retail sector and the impact of financial decisions on businesses and their stakeholders.