TaxCorporate Tax£1.5bn tax liability for C&W

£1.5bn tax liability for C&W

A potential tax liability could indefinitely tie-up almost 70% of Cable and Wireless' net cash.

Link: C&W backs treatment of accounts

A clause in the 1999 agreement with Deutsche Telecom means that £1.5bn of its £2.2bn net cash could be forced into an escrow account in case of tax liabilities.

The telecoms group has been criticised for not declaring the clause to shareholders, but responded by saying it had ‘no requirement’ to do so.

The clause was triggered late Friday after the group’s debt rating was downgraded to junk status by Moody’s. C&W claims that its auditor, KPMG, advised there was no reason to reveal details of the clause because a downgrade was considered a sufficiently remote possibility.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

1m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

3m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

4m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

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

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

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

7m 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

8m Alia Shoaib, Reporter