Stagecoach wins £87.8m tax battle

Transport giant
Stagecoach has won
an £87.8m windfall after settling a long-running dispute with the tax-man.

The FTSE 250 company said sticking points with HM Revenue & Customs on
tax issues had been settled.

Stagecoach disclosed in its annual report that it had made a ‘gain of £87.8m
in respect of the resolution of a number of historic tax matters with the tax
authorities’.

In a detailed breakdown of its tax affairs, the company also reported a
credit of £1.5m after corporate tax was cut to 28p in the pound. A source close
to the company said the issue had been running for up to five years after the
company underwent a major restructuring.

The tax win will be seen as a key victory for finance director Martin
Griffiths. The annual report disclosed that Griffiths’ pay rocketed by more than
40% to £821,000 compared to £575,000 in 2006/07.

A former chairman of the Group of Scottish Finance Directors, Griffiths’ pay
packet was made up of a basic salary of £360,000, cash and share bonuses, and
non-pensionable allowances.

UK plcs often make large provisions in their accounts for unresolved disputes
with HMRC. Vodafone set aside more than £2bn to cover the possibility of losing
its controlled foreign companies wrangle with the government.