BT secures £1bn tax rebate
Telecoms colossus wins nine figure refund on ten years of corporation tax payments, after reaching an agreement with HMRC
BT has recouped £1bn from
the taxman after striking a deal linked to ten years of corporation tax
payments. The FTSE 100 company announced the good news in its third quarter
report today.
HM Revenue &
Customs invited the
FTSE 100 heavyweight to the
discussion table in order to skirt a costly litigation battle that could have
ensued if a compromise had not been reached.
After the successful outcome, HMRC may take a similar course of action to
settle disputes with other corporates. BT’s chief exec David Verwaayen quipped:
‘It’s a good deal, and breaks my heart for the tax lawyers.’
BT disclosed revenues of £5.1bn in the report, up 5% from the corresponding
period in 2005. On December 31, 2006 its pension deficit, calculated in line
with IAS 19 requirements, was £1.1bn.
The company also reaffirmed its intention to make a significant injection
into the pensions pot during the next ten years, beginning with an
£840m up-front payment covering the first three years.
The company said of the plan: ‘BT will make deficit payments equivalent to
£280m per annum for 10 years with the first three years’ instalments paid up
front: £500m in December 2006 and the remaining £340m by April 30, 2007.’
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