TaxCorporate TaxACT bill could climb to millions

ACT bill could climb to millions

The UK government could be facing a settlement bill far beyond its expectations as a result of cases brought against the Inland Revenue over advanced corporation tax.

Link: Taxman faces multimillion pound claims

Dawn Primarolo, paymaster general, recently revealed the government had already paid out £32m in the cases. But companies making claims now total 400, leading experts to guess that the total payout could climb to hundreds of millions.

Primarolo was responding to a parliamentary question from MP Denzil Davies when she revealed the payouts to date. ‘I was staggered by the figure as it only covers a small number of cases,’ said Davies. Experts believe that only 10% of companies involved in the litigation have reached settlement.

The problems stem from a European Court of Justice ruling which meant ACT need not have been paid on dividends from UK subsidiaries of foreign companies in the EU. One European tax expert who worked close to the ACT case, believes the total bill for the group litigation could exceed £300m and could rise to as much as £500m, far exceeding original estimates.

Hoechst, a German manufacturer, is understood to be in the closing stages of settling with the UK government.

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

3m Austin Clark, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

3m Clear Books | Sponsored
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

3m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
Should I incorporate my buy-to-let business?

Corporate Tax Should I incorporate my buy-to-let business?

4m Emma Rawson