Deloitte and PwC disappointed at FII dividend case cap - Accountancy Age.
The Age notes:
Tax experts have expressed disappointment after a class action victory challenging the taxation of dividends to UK companies from overseas businesses was severely limited.
In the Franked Investment Income Group Litigation Order spearheaded by tobacco giant BAT, judges said only claims dating from 2004 should be considered, freezing out claims stretching back to 1973.
The UK government had previously suggested £7bn could be at stake.
And it adds:
"Today’s ruling effectively closes the door on any common law remedy being available for corporation tax where claims fall outside the six year time limit, which is unexpected and very disappointing," said Peter Cussons, head of EU direct tax group, at PwC.
"Claimants with claims from 23 February 2004 onwards can still file a statutory claim, but as disputes can go as far back as 1973, this potentially leaves 31 years of ineligible claims with no remedy under common law."
So let's untangle that. What the judge was really saying was that a bunch of chancers were trying to profit at expense to the publixc purse at a time when that purse needs all the cash it can get and he wasn't going to help them do so.
That may not be quite what the ruling said, I'm sure, but it seems to be what PWC wanted to do - and as bigger waste of public money it is hard to imagine.
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As ever, Richard, your language is emotive on a subject that is, to all intents and purposes, uncontroversial.
The key elements of the FII case are:
1. The relevant legislation was flawed and not in compliance with the EU fundamental freedoms. These are the principal reasons why the GLO is being taken.
2. Given the above the “chancers” are exercising their rights to tax compliance, ie: paying the right amount of tax (but no more), for which you argue passionately. Your commitment to this principal must work both ways.
3. HMRC and HM Government are arguing that such claims are “against the national interest” at the current time. This is disingenuous to a huge extent. They should have got the rules right in the first place.
4. UK company law requires companies to act in the best interests of their shareholders within the wider context of UK law. The “Chancers” to which you refer are exercising their rights within UK law to serve the best interests of their shareholders. If HM Government does not like this then they can either change the law or pursue a course of action similar to the waiving of the competition ruling when Lloyds acquired HBOS, ie: using the law to suit their own purposes.
@Richard
Emotive, maybe. Politics is. This is politics
The issue is not as you put it though
First you misstate the duty of directors – shareholders are not their only concern
Second you assume stability in the shareholding – which is nonsense. There is in tax a concept of unjust enrichment. If it was shareholders who lost from this (and that’s debatable) then those from 1973 cannot benefit now
As such the ruling is reasoned and appropriate and the claim to back date was one for unjust enrichment and therefore the suggestion I made that those making it were chancers was based on logic and a legal concept