PracticeAccounting FirmsPwC sued by NHBC for £35m in tax dispute

PwC sued by NHBC for £35m in tax dispute

NHBC is suing its auditor PwC over allegations the firm failed to disclose the council was overpaying corporation tax

PwC sued by NHBC for £35m in tax dispute

The National House Building Council (NHBC) is suing its auditor PwC for £35m, over allegations the Big 4 firm failed to disclose that the council was overpaying corporation tax.

NHBC alleges that PwC did not inform them of a change in law in 2005, which meant the council was no longer required to pay tax for increases in the value of substantial investments in index-linked, gilt-edged securities.

The council, which is a provider of insurance for new homes, says it overpaid corporation tax by £41.46m over a decade, until PwC alerted them of their overpayments in March 2016.

Although the council has been able to reclaim £13.8m from HMRC, a large chunk of the overpaid taxes cannot be claimed as the four-year claim period for tax errors has expired.

The case has been brought to the Commercial Court, with NHBC aiming to reclaim the outstanding £27.6m and £7.3m in interest.

This legal action is the latest blow to the Big 4 firm, who have recently been dropped as Wetherspoon’s auditor and had their bank auditing rights revoked in Ukraine.

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