Partly Cloudy

Partly Cloudy

max temp: 16°C

min temp: 9°C

Search

Bury St Edmunds: Greene King rejects Minister’s ‘tax avoidance’ claim after tribunal ruling

16:54 28 April 2014

The Greene King brewery in Bury St Edmunds.

The Greene King brewery in Bury St Edmunds.

Archant

Pubs and brewing group Greene King has denied suggestions it has been engaging in tax avoidance after losing the latest round in a battle with HM Revenue & Customs.

shares

The Bury St Edmunds-based company, which says that it pays seven times more in tax than it does in dividends, added that it was considering a further appeal against the ruling.

According to HMRC, a scheme marketed by accountants Ernst & Young in 2003, involving internal loans between group companies, was designed to enable tax relief to be claimed on interest paid to another group company without that other company paying tax on the income it received.

However, the Upper Tribunal for tax affairs has now upheld a lower tier ruling that the scheme does not work.

HMRC says this means that Greene King and a number of other major companies which have also been using the scheme will between them have to pay an additional £36million in tax.

In an HMRC statement yesterday, Exchequer Secretary David Gauke said: “The vast majority of taxpayers play by the rules and the Government will continue to take tough action to tackle the minority who seek to avoid their responsibilities.

“HMRC wins 80% of the cases it takes to court and this win, in a very complex case, sends another clear message to tax avoiders. Anyone who gets involved in tax avoidance schemes is playing with fire. HMRC will pursue those involved through the courts, ensuring it collects the taxes that are due.”

However, Greene King, a member of the EADT/EDP Top100 listing of the 100 largest companies in Suffolk and Norfolk, said that the Upper Tribunal judge had accepted the the dispute was about the correct treatment of a loan for tax purposes and not a case of tax avoidance.

“Greene King has been paying its taxes for 214 years and has always taken these responsibilities very seriously,” the company said in a statement.

“We are a major contributor to the Treasury with a third of our turnover, or £375m, paid to HMRC in various forms of tax, in the last year alone. This is seven times what we pay to our shareholders in dividends.

“Over and above this, we occasionally take specific tax advice from experts, such as Ernst & Young in this case, about other areas of potential tax paid by Greene King.

“In this case, the Upper Tribunal court has disagreed with the advice we received and we are therefore currently considering whether to appeal this decision. The Upper Tribunal judge expressly said this was a question of correct accounting treatment of a loan, not tax avoidance.”

shares

1 comment

  • The amounts of VAT and excise duty spuriously included in turnover are neither here nor there. The relevant comparison is between the amount of Corporation Tax paid, and the amount of dividends to shareholders.

    Report this comment

    John Green

    Tuesday, April 29, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

Drink driver in court

Two drink-drivers have been banned from the road after appearing before Ipswich magistrates.

The new bandstand is completed in Elmhurst Park, Woodbridge.

A Suffolk town is celebrating the arrival of its new bandstand with a Party in the Park.

Abellio Greater Anglia train at Ipswich station

Trains have been cancelled until 3pm at the earliest today between Ipswich to Felixstowe following a signalling fault.

Crash closes lane of A12 at Capel St Mary

A woman was taken to hospital with head injuries following a crash which closed a lane of the A12 this morning.

South East Suffolk Magistrates Court

A 21-year-old Ipswich man has admitted entering garages with intent to steal in a act of stupidity.

Mark Millar, chief executive of St Elizabeth Hospice, with Paul Winter, chief executive of Ipswich Building Society.

Ipswich Building Society has been named as the community engagement partner for one of Suffolk’s biggest ever mass participation and public art events.

Drivers who refuse to put down their mobiles are targeted

Traffic police in Suffolk and Norfolk stopped 36,000 drivers in a year on suspicion of what are termed the ‘Fatal Four’ motoring offences.

Woman on bail for more than two years

The length of time suspects are bailed in Suffolk has been questioned after it emerged three people were kept on police bail for more than two years after their first arrest.

Sizewell C groundwork

Disappointment was voiced last night over renewed uncertainty for Suffolk residents waiting for a decision on Sizewell’s new nuclear reactors.

Despite wet weather, people head to Felixstowe for ice cream or just a walk in the rain.

Scarcely a few weeks have passed since talk of hot and humid temperatures interrupted by heavy rain and flash thunderstorms.

Most read

Most commented

Topic pages