Jessica Fino 6 Jun 2017 12:26pm

KPMG warns partners over potential tax bill

Sky News reported on Monday that around 500 existing and retired partners received a letter from the firm explaining that they could face tax bills running to tens of thousands of pounds

The row with HMRC relates to money that KPMG puts aside every year to cover its partners’ tax bills.

The report said the firm sets aside half of their pay to settle the tax bills. But sources told Sky that the tax owed could be 10% more than what has been saved up.

The issue relates to a bill dating from seven years ago and involves its Middle East operations, said the report, as well as its accounting for acquisitions in the UK and other disagreements about its tax deductibility eligibility.

KPMG said it did not comment on the specifics of its tax affairs.

A spokesperson from the Big Four firm said, “Like most organisations KPMG is in regular discussion with HMRC as to our tax liabilities.

“In keeping with our tax principles, and our published tax strategy, we make full disclosures to HMRC on all tax aspects including those where the tax treatment is not clear either in law or guidance.

“Again, like many large organisations, we will, on occasion, dispute HMRC’s interpretation of tax law, particularly where it contradicts previous guidance or practice.

“Tax enquiries can go on for many years, with both HMRC and taxpayers consulting with tax law experts in particularly complex areas,” the spokesperson added.

HMRC said it will not comment on identifiable individuals.

In January 2016 Patrick McCoy, KPMG’s former UK head of investment advisory, left the Big Four firm over his involvement in a film investment scheme. A few months earlier four of KPMG Ireland's most senior partners were arrested in connection with suspected tax evasion.