The Franked Investment Income group litigation order is worth EUR7bn (£5bn)
to the UK exchequer alone, it has emerged.
In a disclosure to Private Eye magazine, HM Revenue & Customs
has said that its counsel revealed the number in court at the end of November.
The huge potential cost of the action will surprise many, and may suggest
that early estimates that the group litigation orders threatened more than £20bn
of government money may be conservative. The controlled foreign companies
challenges, combined with the group relief case, had been thought to be more
significant in terms of the values involved.
It also threatens to throw out government budget predictions if the ECJ rules
in favour of the companies involved. The advocate general is set to give his
opinion on the case in February, though further legal wranglings even after the
court rules on the case, are likely to delay the impact much longer.
The disclosure by HMRC follows pressure from both Private Eye and
Accountancy Age for the government to reveal the contingent liabilities
in government accounts relating to the actions. The government said that the
latest move did not in any way affect its reluctance to give broader estimates
of the potential cost.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states