Scottish companies may face £400m tax bill over EBTs

Scottish companies could be facing combined tax bills of up to £400m to settle with HMRC over their use of tax avoidance schemes previously promoted by RSM Tenon.

The schemes were run by Premier Strategies, the now closed division of RSM Tenon, and used employee benefit trusts (EBTs) to shelter up to £1bn for dozens of Scottish companies, according to the Herald Scotland

Following news that HMRC is challenging a recent tax tribunal decision in favour of Rangers use of EBTs, Premier Strategies is now inviting clients to settle with HMRC at a predicted cost of 40% of their sheltered cash.

The Herald Scotland quotes a letter to Premier EBT clients which states:' We have recently been in correspondence with HMRC about the implications of the Rangers case. HMRC is continuing to challenge EBT cases.'

According to the paper, Premier's letter tells clients they have a 20% chance of winning outright at a tax tribunal, a 60% chance of a partial victory, and a 20% risk of HMRC winning outright. In a partial victory, the business might still have to pay up £400,000 for every £1m sheltered, while a negotiated settlement with HMRC would probably cost £412,000 for every £1m, the letter claims.

A spokesman for RSM Tenon said: 'Premier Strategies closed to new business in March 2012, and the former directors of Premier Strategies no longer work for RSM Tenon. Support to clients is now provided by RSM Tenon staff.'

The firm did not comment on the letter to clients.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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