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Taxman calls time on Ernst & Young tax avoidance scheme

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Taxman calls time on Ernst & Young tax avoidance scheme

Brewer Greene King has been ordered to hand over almost £9 million in taxes after a tribunal panel denied an appeal, bringing to a close a five year battle over the legality of a tax avoidance scheme.

Including other clients who used the scheme, marketed by Ernst & Young as a way to minimise tax by arranging loans between subsidiaries qualifying for rate relief, more than £30 million in tax is now due.

‘HMRC is cracking down hard on tax avoidance,’ said the agency’s head of business tax Jim Harra. ‘We have a strong record of defeating avoidance schemes in the tribunals and courts, where we win 80% of cases.’

The ruling by the Upper Tribunal was the final stage in a drawn-out legal process following an initial 2011 ruling that the scheme, which was arranged in 2003, was illegal.

Since the beginning of 2016 the HMRC said it has successfully challenged a total of £648 million in tax avoidance.

Greene King is liable for £8.7 million, with a further £22 million due from others.

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