The Body Shop is exploring a deal to cut its tax bill and raise extra cash for creditors affected by the brand’s administration.
The embattled beauty business’ administrator, FRP Advisory, has reportedly drafted a plan to retain £66m worth of tax benefits amassed prior to its insolvency, according to The Times.
This could help to reduce the amount of corporation tax placed on the business in the future, and is dependent on The Body Shop exiting administration and returning to profitability.
It was revealed the redundancy bills for staff affected by store closures would be footed by the UK’s taxpayers.
Affected employees were told to make a claim to the Redundancy Payments Service, a government-backed scheme funded by national insurance contributions.
British MPs recently demanded that the UK insolvency watchdog should reveal how costly The Body Shop's administration will be to taxpayers.
Liam Byrne, Chairman of the business and trade committee, wrote to the Insolvency Service asking for more clarity on the redundancy costs.
FRP advisory is also rumoured to be mulling a company voluntary arrangement (CVA) in a bid to secure the troubled business’s future.
The accountancy firm has allegedly drawn up proposals for a CVA which would see the cosmetics brand enter talks with landlords about rent cuts, as well as other creditors.
The proposed CVA is the latest move by Aurelius to save the ethical beauty retailer after its UK and Germany businesses collapsed into administration on 13 February.
The Body Shop’s Denmark arm also filed for bankruptcy on 29 February, while its French subsidiary fell into administration on 4 April, filing for bankruptcy with the Paris commercial court.
In the UK, 197 stores have closed as part of its restructuring process.
The store closures and job cuts come after an extended period of financial challenges for The Body Shop.
This included multiple consecutive quarters of losses with former owner Natura & Co.
FRP Advisory is also allegedly exploring the claim that millions of pounds were taken out of the company before it fell into administration.
