PwC sued by NHBC for £35m in tax dispute
NHBC is suing its auditor PwC over allegations the firm failed to disclose the council was overpaying corporation tax
The National House Building Council (NHBC) is suing its auditor PwC for £35m, over allegations the Big 4 firm failed to disclose that the council was overpaying corporation tax.
NHBC alleges that PwC did not inform them of a change in law in 2005, which meant the council was no longer required to pay tax for increases in the value of substantial investments in index-linked, gilt-edged securities.
The council, which is a provider of insurance for new homes, says it overpaid corporation tax by £41.46m over a decade, until PwC alerted them of their overpayments in March 2016.
Although the council has been able to reclaim £13.8m from HMRC, a large chunk of the overpaid taxes cannot be claimed as the four-year claim period for tax errors has expired.
The case has been brought to the Commercial Court, with NHBC aiming to reclaim the outstanding £27.6m and £7.3m in interest.
This legal action is the latest blow to the Big 4 firm, who have recently been dropped as Wetherspoon’s auditor and had their bank auditing rights revoked in Ukraine.
