BIRKENHEAD’S Park Group is to use cash won from the taxman to fund new developments in its pre-paid card.

The Christmas hampers to financial products business received £1.9m from HM Revenue & Customs after an appeal against the VAT accounting treatment of commission paid to its agents.

Park also expects to receive up to £2.5m in interest related to the claim and reimbursement of professional costs of approximately £350,000.

Managing director Chris Houghton revealed the proceeds will help fund the development of its pre-paid card, which was launched in May this year.

“It is worth having the cash in the bank and it will go towards funding working capital,” he said.

“We have been spending quite a bit as we have a lot of new products coming on line – so I would rather we had this money than not.”

Park’s pre-paid card, flexecash, was launched after three years of development and investment worth £3m in state-of-the-art processing systems.

It was first targeted at Park’s lucrative Christmas savings market, but is now being rolled out into the corporate voucher arena.

Park chairman Peter Johnson explained: “Flexecash provides a direct link between retailers’ point of sale equipment and our card processing system, which helps to reduce costs compared with other solutions in the market.

“The potential for this pre-paid card is substantial, as it offers numerous new areas of application for existing and future customers.”

He said it was linked to Park’s continued use of the internet in developing business, allowing swift product innovation and an opportunity to expand the group’s range of customers.

“It has changed the way we operate to an extent that was unimaginable less than a decade ago.”

Mr Houghton explained that, since the card’s launch, the group has worked on a vast range of complementary products, extending as far ahead as Christmas, 2011.

“We are currently developing products in the pre-paid card market and gift card market,” he said.

“We have one on the market, love2shop and another, love2choose, for corporate customers, but it enables people to spend on the high street or on one of our websites.

“We have variations coming along, such as a love2travel card to pay for holidays through our travel agent.”

He said the VAT proceeds will fund software development for future flexecash products.

“The pre-paid card will start small, as with anything, but ultimately we hope it will be reasonably big.

“We will be offering a range of products linked to the pre-paid card this Christmas, and we have more in the pipeline for Christmas, 2011.”