PricewaterhouseCoopers Seeking to Recover £300 Million in Stamp Duties
Pricewaterhouse Coopers has been granted a GLO or Group Litigation Order by the high court to bring together the actions for the recovery of potentially unlawfully levied 1.5% stamp duties.
If the move is successful, it could cost the Treasury up to £300 million.
The group consists of former and current public companies that had suffered from capital duty on the issue of shares going into foreign markets. To date, claims issued exceed £150 million.
In case interest is available on compound rates, the Treasury’s exposure may double. If there are further claims, it could make the Treasury’s exposure double to an excess of £0.5 billion.
After a European Court of Justice (ECJ) ruling which made the UK’s tax treatment of cross-border share issues unlawful, GLO has been given a year to take care of the issue. The case involved Vidacos Nominees Ltd v HMRC and HSBC Holdings plc and the court held that a clearance service was a capital duty and contrary to European Union law.
Paul Emery, who is the Stamp Taxes Director at PricewaterhouseCoopers, said that this particular tax was one on UK public companies accessing US and other capital markets that is not imposed on their European counterparts, meaning UK companies are unfairly disadvantaged in accessing foreign capital.
Emery also added: “The ability of UK companies to raise finance freely as appropriate is critical to their competitiveness.”
Mark Whitehouse, who is a partner at Pricewaterhouse Coopers Legal, said both the general and legal part of the firm will work together in supporting their clients to recover tax unlawfully levied and to seek to restore them to a just position. He also said that the GLO is a critical step in that process”.