Lorraine Kelly's entertainment firm hit by slump in profits

Lorraine Kelly sparked controversy during the court case earlier this year. Tristan Fewings/Getty Images

Ms Kelly won a court battle with HMRC earlier this year after they ordered her to pay a £1.2 million income tax and national insurance bill.

HMRC claimed Albatel Limited - the firm through which Ms Kelly runs her entertainment work - was a front to allow her to pay less tax.

She denied the allegations during the court battle.

But she sparked controversy when she successfully argued she is a “theatrical entertainer” and entitled to deduct fees paid to her agent.

Now new accounts for Albatel Limited, reported in the Daily Record, have revealed that the company’s turnover dropped from £1.9 million in 2017 to £1.3 million in 2018.

Pre-tax profit slumped by £620,000 from £1.169 million in 2017 to £549,000 in 2018.

But, according to the accounts, the company is still wealthy with an ongoing “retained earnings” at the end of the year of £3.3 million.

Ms Kelly and her husband Steve established Albatel Limited in 1992.

They were paid £330,000 in dividends from their firm last year.