PwC seeks $250m Lehmans tax refund
Lehamn Brothers International Europe administrators paid $185m in NIC, PAYE and VAT to HMRC but want to recoup $250m in corporation tax repayments
Lehamn Brothers International Europe administrators paid $185m in NIC, PAYE and VAT to HMRC but want to recoup $250m in corporation tax repayments
Trying to wind down the remains of Lehman Brothers International Europe
(LBIE) must be hard enough, but the situation becomes even more of a minefield
when tax affairs conducted across several jurisdictions are taken into account.
But that hasn’t stopped PwC’s Lehmans administration team from crunching some
serious numbers around what it owes various taxmen – and what they owe the
adminstrators.
Administrators have paid out $185m (£120m) in NIC, PAYE and VAT payments to
HMRC, but want to recoup at least $250m back in corporation tax repayments
because of Lehmans’ losses. The administrators for LBIE have filed 208 tax
returns so far, but PwC says its most pressing tax issue is pinning down HMRC
for the corporation tax repayments.
Working out Lehmans’ exact tax position is tough because its European
operations still have to be levelled out for tax purposes – and both sides are
unwilling to give away any ground. Administrators from PwC have kept details of
specific tax issues out of the latest six-monthly creditors report, but has
released information to Accountancy Age.
The administration occurred before Lehmans’ 2008 accounting year-end, so
financial accounts were not fully prepared for LBIE. Because of this, major
adjustments are expected in various tax positions due to complex inter-company
dealings between UK and overseas affiliates. The value of assets and liabilities
on the LBIE balance sheet will only become apparent when the dealings are
settled and agreed, PwC told Accountancy Age.
“It will take some time to finalise balances and hence conclude an agreement
with HMRC,” said Steve Pearson, PwC joint administrator.
HMRC said it did not comment on individual cases.