BusinessCompany NewsBT issues demand for £10m pension refund

BT issues demand for £10m pension refund

The government's pensions crisis deepened this week after it emerged that the UK's biggest pension fund is leading a High Court fight to recover £10m in overpaid tax from the Inland Revenue.

Link: Pensions group publishes ‘risk’ audit

BT Pension Scheme, which has assets of £22.8bn, is leading 13 other funds in a fight to reclaim unpaid tax credits on foreign income dividends.

Christopher Morgan, head of the EU tax department at KPMG advising BTPS, said the fund had a ‘very high chance’ of success and that any fund with assets above £1bn could be in for a windfall. ‘The claim could secure repayments of many millions per fund,’ he said.

The government has received a barrage of criticism over last month’s pensions bill with critics saying it failed to address investors’ concerns. Terry Faulkner, chairman of the National Association of Pension Funds, said the bill did nothing to encourage firms to offer decent pensions or keep existing schemes open.

Figures from the NAPF reveal that the top 30 public and private pension schemes have assets of over £237bn. Should they all join forces in the BTPS’s tax claim, the government could be facing a bill far in excess of £100m. The case will be fought by Mark Whitehouse, a partner at law firm McGrigors, formerly Klegal. He said he expects to learn the date of a High Court hearing by April.

‘This is a claim based on non-compliance of UK law with EU law,’ said Whitehouse. ‘We say that the legislation acted as an incentive for pension funds to invest in the UK, and UK companies [rather than in Europe].’

The case centres on tax relief BTPS says it should have received on dividends from overseas investment.

The credits should have applied between 1 July 1994 and 1 July 1997, after which Gordon Brown removed tax credits on dividends in a move that caused widespread outrage.

A spokeswoman for the Inland Revenue would not comment.

Email David_Rae@vnu.co.uk

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor