In 2012, General Electric’s director of tax policy, Will Morris, received a trophy from HMRC, in recognition for his role in “informing the public debate on large business and tax and condemning tax evasion and abusive tax arrangements with no commercial purpose”.
However, move forward 8 years and HMRC are now accusing GE of a $1BN tax fraud.
The FT reports that the it stems from just before Christmas in 2005 when GE’s tax team convinced HMRC to approve a tax deduction on a controversial transaction that would go on to save the company hundreds of millions of dollars.
The agreement, reached after six months of meetings with HMRC, meant GE could circulate billions of dollars between the US, the UK and Australia without falling foul of Britain’s new anti-arbitrage tax laws, which had come into force just months earlier.
HMRC has claimed that it was deceived by GE during the six months of negotiations in order for it to obtain a “triple dip” tax advantage in all three countries. It has alleged that the US group misled its executives into believing the transaction would be used to invest in an Australian business, when instead, it claims, the money was moved around the group for the purpose of creating tax deductions.
HMRC has asked the High Court to annul the 2005 agreement, which would force GE to pay 15 years of taxes on the transaction, plus interest and fines, totalling more than $1bn.
GE has denied it misled HMRC about the nature of the transaction and hast has countersued in an attempt to force HMRC to drop the case. “GE complies with all applicable tax laws in every country where we do business, and we reject the UK tax authority’s allegations and are vigorously contesting these false claims,” it said in a statement.
The case is expected to turn on what was said in the first meeting between GE and HMRC on April 1 2005. GE claims it was clear about the purpose of the transactions during the meeting.
“The defendants will rely at trial on the evidence of what representations were actually made . . . as opposed to what are now merely inferred by HMRC.”
This will run and run!
Tax does have to be taxing.
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Muppet organisation
ReplyDeleteAs a former HMRC officer, it saddens me to say that their culture of incompetence only matches their infamous culture of misconduct.
ReplyDeleteIn a case I retain evidence of, a Senior Officer manager committed offences under the DPA and CRCA 2005 which were covered up by a Grade 7, Grade 6 and HR personnel, and were ignored by the HR Director and CEO. Had the case been handled in accordance with established procedure and the law, the manager would have faced Gross Misconduct and Dismissal (with loss of pension) and prosecution before the courts. Previously, HMRC staff had, correctly, been sacked for much less...
Rotten and corrupt to the core...they've never denied it, they just hoped it would go away and that the public would never know.
This is a great blog for independently discussing and exposing the reality of HMRC, issues that the mainstream publishers, who rely on being fed HMRC copy from the Press Office (propaganda team) to commercially survive, would not usually allow to be aired - and if, on occassion, they do, such dissenting comments swiftly disappear.
Make of it what you will.
If you retain evidence of criminal offences committed by HMRC why on earth don't you pass it on to the police. If you aren't going to do anything with it why bother retaining it.
DeleteSomething in your story doesn't add up.
It looks like anon 6 aug 7:13 has been instructed by the press office / propaganda team to discredit the earlier comment. There is quite a bit in the story that adds up if unlike anon 7:13 you have a conscience. It adds up very well and by removing backside kissing Toadies would be a step in the right direction to restoring credibility in HMRC.
DeleteUtter drivel. As if HMRC's Press Office has the slightest interest in this site! And there is absolutely nothing in this story that adds up. This fantasist has been banging on for years now about having evidence of criminal activity within HMRC and has repeatedly refused to say what he is going to do with it. The answer is clearly that he is going to do nothing with it because it does not exist.
DeleteHMRC have asked to annul the evidence from 2005 in the GE shenanigans.
ReplyDeleteSo please DO SOMETHING ABOUT THE LAWBREAKING as I am getting fed up of posts telling you to do so.
Or just stick it on Facebook and not just here.