Icebreaker threatens to sue Deloitte
Icebreaker Management, the company behind recently defeated avoidance scheme Icebreaker, has threatened Deloitte with legal action.
The company had employed Deloitte to act as instructing party to counsel after HMRC took Icebreaker to a tax tribunal over its scheme.
In May, the tribunal ruled that the scheme, used by more than 1,000 investors including Take That's Gary Barlow, was known to all who used it to be a tax avoidance scheme.
It had attempted to shelter more than £300m and scheme users are now facing substantial tax repayments.
According to an email to investors seen by the Times, Deloitte was sacked as the company's legal adviser after the head of its tax policy group, Bill Dodwell, wrote in Tax Adviser that any appeal would be doomed to fail.
He wrote: "We should congratulate the tribunal on the insight and plain speaking which makes it clear there cannot possibly be a successful appeal. Hopefully, all the members will settle up quickly.”
Caroline Hamilton, Icebreaker founder, wrote in the email that Deloitte had been in breach of duties as Icebreaker's instructing solicitors.
It appointed Rosenblatt Solicitors to 'take action' against the Big Four firm if necessary.
In addition, according to Martin Taylor, head of client relations at Rebus Group, said since the decision, "It has come to light that investors in a number of Icebreaker schemes dating from 2009 were offered insurance as a means of ensuring their investment capital was protected in the event of a negative decision by HMRC.
Taylor adds: "Based on correspondence from the insurers solicitors, it is clear that the insurer believes it was not provided with the relevant information. The insurer has voided the scheme and agreed to repay the premiums.
“In less than 40 days, the Icebreaker investors have a) lost in Court, b) lost their insurance cover, c) have a conflicted adviser probably requiring replacement. Worse still, in many cases the firms which advised investors to invest, have either become insolvent or the directors have ‘phoenixed’ the businesses so as to avoid the inevitable claims which would surely follow.
The appeal deadline following the tribunal decision has now been deferred to 21 November to allow Icebreaker members to agree terms on those issues the Judge decided were questions of fact.
Deloitte said it wasn't commenting on the situation at the moment.