Unicomer St. Vincent Ltd, the company that operates Courts furniture store, is facing a tax bill that has grown to approximately $20 million following a long-running legal battle with the government.
The dispute began when the Comptroller of Inland Revenue audited Unicomer’s accounts for the years 2007 to 2011, and later up to 2015. The tax office claimed the company owed $12.66 million in unpaid taxes, interest, and penalties.
The case moved through several levels of the legal system before reaching the final stage:
- Appeal Commissioners: The company first appealed to the tax commissioners, who ruled in favor of the government in 2018.
- High Court: Unicomer then took the case to the High Court, which also upheld the tax assessments in 2021.
- Court of Appeal: In April 2024, three appeal judges dismissed Unicomer’s appeal, confirming they owed the money.
- The Privy Council: Finally, the case went to the Board of the Privy Council for a final decision.
The results from the Privy Council are a major loss for Unicomer on a key part of the case, while other parts remain unsettled.
Loss on Income Recognition: The Board ruled against Unicomer regarding how it records income from hire purchase sales.
Unicomer argued it should only pay tax on money as it was received in installments, but the Board upheld the Revenue’s decision that the full price must be counted as income when it is first entered into the company’s books.
Insurance Issues Sent Back: Regarding the company’s credit protection insurance (CPI) arrangements, the Board did not cancel the tax assessments.
Instead, it sent these issues back to the Appeal Commissioners to be looked at again. The Board noted there was evidence of “abnormal” financial movements where money seemed to go directly to a related company in Bermuda rather than the local insurer.
The Board’s decision means that for now, the assessments against Unicomer have not been quashed.
