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KPMG faces £6m legal battle over alleged slipshod tax advice to property firm

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A London homebuilder that fell foul of a HMRC investigation which uncovered millions in unpaid liabilities is taking KPMG to court for the accounting error, reminding advisers just how taxing tax can be.

12th May 2021
Journalist
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KPMG is being sued for allegedly giving negligent advice that left a client with a multimillion-pound tax bill.

Mount Anvil has logged a claim with the High Court seeking compensation of more than £6m after an HMRC investigation into one of the London homebuilder’s subsidiaries uncovered a tax liability of £3.9m dating back to 2017.

Alongside the outstanding tax bill, Mount Anvil is claiming further borrowing costs of £1.8m it blamed on KPMG and a £290,000 payment it made to the firm for dealing with HMRC.

The property firm also paid £40,000 to auditors RSM for dealing with tax officials about penalties for filing incorrect tax returns, which it wants to reclaim from KPMG as losses.

KPMG prepared tax returns for the property company and its subsidiaries for the five financial years to 2016, and intends to defend itself in court.

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Replies (8)

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By Justin Bryant
13th May 2021 16:23

Normally it's worse for the defendant when the claimant overpays tax due to the adviser's negligence, so I'm not sure what the fuss is about here re alleged excessive tax deductions (it's very unlikely there'll be any tax penalties).

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By Justin Bryant
13th May 2021 16:23

Normally it's worse for the defendant when the claimant overpays tax due to the adviser's negligence, so I'm not sure what the fuss is about here re alleged excessive tax deductions (it's very unlikely there'll be any tax penalties).

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By pmt1pff
14th May 2021 10:07

does anyone know what is actually alleged - article doesnt really give any detail on what the supposed errors were. a real shot in the dark, but kpmg werent aware of the ownership structure and that there were wider group companies who could have claimed group relief?? would be useful to know the details.

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Nefertiti
By Nefertiti
14th May 2021 11:30

Carillion, Mount Anvil, Greensill the list goes on and on. When will our accountancy, regulatory bodies admit that our profession is full of "shysters" with no ETHICS and is subject to wide spread fraud and corruption? As we go to bed anxiously every night, trying out best to cope with the ever rising mountain of legislation, staying up to date with expensive CPD, trying out best to be honest and ethical with our piddly little clients (who begrudge every penny they pay us), the big players simply ignore the rules when they feel like - and they get away with it too.

One rule for the rich and powerful, another rule for the rest of us peasants. (Just like the Covid rules and regulations.) I think its called THE NEW NORMAL.

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Replying to Nefertiti:
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By paul.benny
14th May 2021 14:49

So Lex Greensill is an entirely honest and trustworthy man who ran his company in an exemplary fashion but was led astray by accountants? And the directors of Carillion were selfless people who practically ran the business as a charity until they were forced into insolvency by accountants? And as for Philip Green.. he only received a pittance from Arcadia.

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Replying to paul.benny:
Nefertiti
By Nefertiti
15th May 2021 17:57

paul.benny wrote:

So Lex Greensill is an entirely honest and trustworthy man who ran his company in an exemplary fashion but was led astray by accountants? And the directors of Carillion were selfless people who practically ran the business as a charity until they were forced into insolvency by accountants? And as for Philip Green.. he only received a pittance from Arcadia.


You missed the point, they were all crooks assisted by even more crooked accountants. Why do you try to divert attention from the obvious?
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By tedbuck
14th May 2021 12:48

The headline says 'millions of unpaid liabilities' so I assumed that tax had been underpaid.

KPMG charge high fees to get the right answer so should take care to get it right. Having said that the legislation is now so complex that tax is very definitely Taxing - half the time HMRC don't seem to understand it either which doesn't help and they are certainly not very good at dealing with problems quickly which doesn't help anybody.

I could never undestand why they took so long to have a go at the footy players and their tax scams. If ever a crew deserved attention it was them. Astronomical salaries and huge tax evasion schemes effectively leaving the man in the street to cover their taxes for them. Not very sporting in my opinion. Perhaps HMRC are all footie fans!

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By Mr J Andrews
17th May 2021 13:57

Allegations do not mean errors .........and I gave up on the second reading trying to establish what the specific errors were . [

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