FTSE 100 companies set aside £4.5bn for tax disputes

The UK's largest listed companies collectively set aside £4.5 billion in potential liabilities related to tax disputes last year, according to research.

27 Aug 2019

The UK's largest listed companies collectively set aside £4.5 billion in potential liabilities related to tax disputes last year, according to research.

The research was compiled by Thomson Reuters, which analysed data from the annual reports of the FTSE 100.

This included legal liabilities that were “probable” and could be “reasonably defined” from companies with year-end dates between 1 July 2017 and 30 June 2018.

The FTSE 100 companies also recorded an additional £10.2bn in potential liabilities related to winnable cases, which should not result in any significant financial loss.

The cost of tax litigation is being driven by disputes with tax authorities in emerging markets rather than by disputes with HMRC, the research showed.

Many of the biggest recent tax disputes by value have been with tax authorities in Bangladesh, Brazil and India.

Commenting on the research, Raichel Hopkinson, Head of Practical Law Dispute Resolution at Thomson Reuters, said: 'The rapid growth rate of developing countries can mean that governments are under pressure to raise revenues for public services and infrastructure spending, which can result in a more aggressive approach to enforcing tax laws.

'Tax authorities are taking an increasingly aggressive stance towards potential underpayment by businesses and are more willing to open lengthy investigations and issue penalties for individual infractions that can run into hundreds of millions if not billions of dollars.'

Potential liabilities arising from tax disputes were highest for consumer goods companies, which accounted for £2.9bn of the liabilities and were followed by pharmaceuticals companies with £924m of liabilities.

Quick Links

Home | Contact us | Accessibility | Disclaimer | Help | Site map |

© 2020 Blue Spire Limited. All rights reserved.

We use cookies on this website, you can find more information about cookies here.

Contact Chichester Office

Tel: +44 (0)1243 781234
Fax: +44 (0)1243 791770
Email: chichester@bluespiregroup.com

Contact Brighton Office

Tel: +44 (0)1273 739533
Fax: +44 (0)1273 732844
Email: brighton@bluespiregroup.com

Chichester Address
Cawley Priory, South Pallant, Chichester, West Sussex PO19 1SY

Brighton Address
5th Floor Intergen House, 65-67 Western Road, Hove, East Sussex BN3 2JQ

Blue Spire Limited is Registered to carry out audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales C004152645. Professional indemnity insurance is provided by Royal & Sun Alliance Insurance Plc 9th Floor, One Plantation Place, 30 Fenchurch Street, London, EC3M 3BD and its territorial coverage is worldwide (excluding United States/Canada).
Blue Spire Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. FSA register https://www.fca.org.uk/register reference 566257. This guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at customers based in the UK