Multimillionaire sues PwC for ‘negligent’ advice on how to avoid taxes
Relocating is a stressful experience, even if it is to the glamorous French Riviera. What can make it even worse is if you move to Monaco, a popular tax haven, but end up in a lengthy legal battle with the UK taxman.
John Hargreaves, a multimillionaire whose family has a fortune of £550m, is taking the issue up with PwC and suing the accounting firm, alleging that it gave him bad advice on how to avoid paying taxes over a sale of shares when he moved from England to Monaco two decades ago.
Hargreaves, who founded the UK discount retailer Matalan in Preston, Lancashire, in 1975, says that the “Big Four” firm acted negligently when it advised him to relocate before he sold £237m worth of shares in the company in 2000.
He believed that he wouldn’t have to pay capital gains and income taxes. Unfortunately, HM Revenue & Customs decided that his steps to give up his status as a UK resident were not effective. It wants £135m in tax and interest payments.
At issue seems to be the fact that Hargreaves, who reportedly commuted between the UK and Monaco in a private jet, was continuing to work at Matalan’s UK offices three days a week and staying at his UK home for two or three nights. That appears to have failed to satisfy HMRC over its requirements on residency.
The 76-year-old, who is described as “cautious and risk-averse in relation to tax matters” in the court filing, says that PwC has exposed him to an “exceptionally high amount of tax”.
PwC said it believed the claim would ultimately fail and it was seeking to strike out aspects of the claim.