HMRC settle major tax litigation with leading British businessman and Big Four accountancy firm

HMRC have announced that they have reached a settlement with British property tycoon Jamie Ritblat and leading accountancy firm Ernst & Young. This brings to an end a long-running dispute centring on the tax treatment of payments of c. £141m made out of an employee benefit trust (EBT) to employees of Ritblat’s Delancey business. HMRC alleged that they had been induced to enter into a tax settlement agreement preventing taxation of future EBT payments as a result of misrepresentations made by EY during negotiations. The outcome of the settlement is that HMRC will receive a significant sum and the tax settlement will be brought to an end, allowing any further payments out of the EBT to be subject to tax. HMRC stated that: “This reflects the outcome we would have reasonably expected to achieve if successful at court – without the time and cost of further litigation”.

Katharine Elliot acted for HMRC during the disclosure and case management phases of this complex litigation.