TaxCorporate TaxTax claim is worth £5bn, HMRC reveals

Tax claim is worth £5bn, HMRC reveals

Government finally gives numbers on cost of GLOs - but only one of them

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.

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