More NewsPhoenix Four to bank tax millions from Rover

Phoenix Four to bank tax millions from Rover

Former MG Rover owners set to bank millions of pounds after clawing cash back from the tax authorities

The Phoenix Four, the former owners of
MG
Rover
, are set receive millions of pounds after clawing back over
£16m from the taxman in the same year that the company collapsed.

The
Daily Telegraph
reports that the details of the Phoenix Four’s
windfall are contained in accounts filed for MGR Capital, a company controlling
a book of historic Rover car leases.

This company is 49% owned by the Phoenix Four, John Towers, Peter Beale, Nick
Stephenson and John Edwards, and 51% controlled by Uberior Investments, a unit
of HBOS.

The accounts showed that
MGR
Capital
received £16.2m from HM Customs & Excise in 2005 as a
result of ‘VAT on Voluntary Terminated Hire Purchase agreements’.

This amount boosted the company’s pre-tax profits to £17.3m for the 2005
financial year, a massive increase on the £546,000 reported in 2004. As a result
of the increase a £400,000 dividend was proposed.

A spokesman for the Phoenix Four told the Daily Telegraph the VAT
was claimed back after a change in the rules covering cars purchased by car
financing and leasing companies at the end of their agreements.

He said shareholders planned to put MGR Capital into liquidation when the
final leases ran out, probably next year. Any cash would be distributed among
the creditors and shareholders. This would include repaying the £500,000 that
each director originally invested in MGR Capital.

The accounts also revealed that MGR Capital had retained profits of £22m at
the end of 2005. This some will be divided between the Phoenix Four and HBOS
when it is wound up.

The news came as the Department of Trade and Industry admitted that its
investigation into the collapse of MG Rover would continue into 2007. The
inquiry has already cost £7m, which amounts £12,000 a day for the last 18
months.

Further reading:

Read more
about the Phoenix Four

Taxpayers stung by Rover’s decline

Rover funds still up for grabs

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