USC collapse will cost taxpayer £700,000

Sports Direct first approached administrators over a possible pre-pack administration last November

The taxman will be left nearly £700,000 out of pocket due to the collapse of billionaire Mike Ashley’s fashion chain USC, which is the subject of a parliamentary inquiry.

It has also emerged that Sports Direct, its parent company, first approached administrators over a possible pre-pack administration last November – two months before staff at the company’s Scottish warehouse were given 15 minutes’ notice that they would be made redundant.

USC was put into administration by Sports Direct and was bought back immediately also by Sports Direct, with its £15.3m debts to staff, suppliers and landlords wiped clear.

Administration documents filed with Companies House are expected to be pored over by the Scottish Affairs Select Committee, which will question Mr Ashley and other executives from Sports Direct about the administration and the company’s use of zero-hours contracts.

The papers show that HM Revenue & Customs is owed £576,449 in unpaid taxes and staff are owed £106,005 in wages and redundancy pay. The formerstaff’s pay will be covered by the taxpayer.

Other suppliers, including fashion labels Diesel (owed £1.3m), G-Star (£1m), Converse (£657,000) and Adidas, Henri Lloyd and Liam Gallagher’s Pretty Green fashion line (owed a total of more than £7m), are unlikely to get their money back.

When USC went into administration, staff at the Dundonald warehouse, which was shut down with 84 redundancies, were told to load Sports Direct vans with stock that was then sent to the retailer’s headquarters. However, the warehouse owner – Sir Tom Hunter’s West Coast Capital – found out about the possible administration launched a 11th-hour blockade over an unpaid bill.

The documents suggest the bill was paid, because West Coast Capital is not listed as an unsecured creditor – although several landlords are owed hundreds of thousands of pounds.

Politicans have raised questions over how the administration was handled.