The Financial Times reported (16 September) that GE has agreed to pay $112m in deferred tax which represents about 10% of the potential exposure set out in the company’s 2020 annual report, which notes:
‘The UK tax authorities disallowed interest deductions claimed by GE Capital for the years 2004–2015 that could result in a potential impact of approximately $1.1bn, which includes a possible assessment of tax and reduction of deferred tax assets, not including interest and penalties. We are contesting the disallowance.’
Replying to the APPG tweet, HMRC’s press office noted that ‘HMRC does not do sweetheart deals. All settlements must be fully in line with the litigation and settlement strategy’ and ‘HMRC never compromises on its view of the law in order to secure a tax agreement, and our strategy sets out that we legally cannot settle for any amount less than we would reasonably expect to obtain from going to court’.
The case dates back to a settlement originally reached with GE in 2005 which covered the tax treatment of a number of transactions. HMRC had subsequently argued that it was not bound by the agreement, alleging that GE had made fraudulent representations in the course of reaching that settlement.
The Financial Times reported (16 September) that GE has agreed to pay $112m in deferred tax which represents about 10% of the potential exposure set out in the company’s 2020 annual report, which notes:
‘The UK tax authorities disallowed interest deductions claimed by GE Capital for the years 2004–2015 that could result in a potential impact of approximately $1.1bn, which includes a possible assessment of tax and reduction of deferred tax assets, not including interest and penalties. We are contesting the disallowance.’
Replying to the APPG tweet, HMRC’s press office noted that ‘HMRC does not do sweetheart deals. All settlements must be fully in line with the litigation and settlement strategy’ and ‘HMRC never compromises on its view of the law in order to secure a tax agreement, and our strategy sets out that we legally cannot settle for any amount less than we would reasonably expect to obtain from going to court’.
The case dates back to a settlement originally reached with GE in 2005 which covered the tax treatment of a number of transactions. HMRC had subsequently argued that it was not bound by the agreement, alleging that GE had made fraudulent representations in the course of reaching that settlement.
