A WEST Cumbrian racing giant has reassured the public it has a strong balance sheet, despite concerns raised over a £9.32m tax bill and the potential to have to return £3.5m of Government funding.

In July it was announced that M-Sport, based in Dovenby, had to take the difficult decision of shedding 63 jobs. The news caused concern among the community about the future of the business, with the website dovenbynoise.uk highlighting potential financial challenges for the M-Sport and its new Evaluation Centre (MEC) which is being built.

The site highlighted that the company had posted a £2m loss and it also raised concerned over a historical issue relating to tax, with HMRC issuing various determination notices indicating corporation tax due of £9.32m for the period between 1998-2004. Dovenbynoise.uk claims that due interest of £7.53m would also be payable.

However M-Sport has now clarified that directors have assessed that the chances of the company being liable for further taxation are remote.

The firm said that the tax bill disclosed in its accounts is known as a contingent liability. "It is either a possible or present obligation arising from past events where it is not probable that there will be a transfer of economic benefits."

M-Sport also benefitted from a £3.5m grant from the Department for Business, Energy and Industrial Strategy (BEIS) in order to create 100 jobs as part of its expansion. However the recent redundancies have caused concern among residents that BEIS may require the grant to be returned. A spokesman for M-Sport said: "The grant funding from BEIS has been provided to support the MEC project. The nature of such funding is that it is dependent on a number of outcomes being achieved over an agreed monitoring period, this is typical of grant funding of this type. During that period the company is monitored by BEIS in line with the requirements of the scheme on a quarterly basis to validate outcomes and to ensure the project is being successfully delivered.

"The grant funding has been disclosed as a liability in the company accounts since the first drawdown in 2016, to reflect that there was and is the potential for its repayment until the outputs have been delivered to the satisfaction of BEIS, and it will continue to be recognised as a liability for the duration of the monitoring period.

"As the 2018 accounts demonstrate, the company has a strong balance sheet and management are satisfied that sufficient cash or assets would be available to discharge any liability without any adverse impact on the company or its liquidity."

M-Sport looks ahead to a brighter future

M-Sport has issued reassurance that exciting possibilities will open up in the future.

"Like most UK businesses, M-Sport has faced a difficult six months and is having to adapt to deal with the impact of COVID-19 in a still uncertain market. Sadly the recent redundancies have been one step in this evolution as the business has been scaled down to meet what is likely to be a reduced demand for the short to medium term. However, M-Sport has an established, worldwide customer base, which has been built up over 40 years, and which will continue to require competition cars, parts and support service. We have a wealth of design and engineering knowledge and experience amongst our team which gives us access to a wide array of opportunities in motorsport, automotive industry and wider engineering. We look forward to the completion of the MEC later this year which will open up further exciting possibilities and we are proud that this has all been possible from our Cumbrian base. Our ability to adapt quickly to change has served us well in the past and will continue to do so in the future."

Test centre on track to be ready for autumn

Progress on M-Sport’s Evaluation Centre is continuing with the multi-million pound facility at the firm’s Dovenby Hall Estate on course for completion this autumn.

Northern Developments’ team has worked through the summer with the building now fully clad and watertight.

All internal pre-cast concrete walls have been installed, and initial partitions to separate the 10,723 square metre workshop from its various departments are taking shape alongside mechanical and

electrical installations.

M-Sport Managing Director, Malcolm Wilson OBE, said: “I’m extremely proud of what we are creating here at Dovenby Hall, and it’s important that we move forward with an operational facility to attract new business and protect existing jobs as well as new skills in the area.

“These are particularly challenging times for so many businesses, but once the Evaluation Centre is up and running I’m confident that we can come out the other side and continue to provide for Cumbria.

“Together with Northern Developments, we will continue to work closely with Allerdale Borough Council to ensure the facility can operate successfully and in compliance with the safeguards in place for the local community.

"Following our most recent testing we have withdrawn the current planning application and aim to submit a revised application for approval in the near future, so that we can be up and running in the coming months.”