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| Version 1 | Version 2 |
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| Greene King continues fight over controversial tax scheme | Greene King continues fight over controversial tax scheme |
| (5 months later) | |
| Greene King has vowed to fight an HMRC decision blocking a controversial tax scheme that has been labelled as an attempt to create millions of pounds of tax relief "out of thin air". | Greene King has vowed to fight an HMRC decision blocking a controversial tax scheme that has been labelled as an attempt to create millions of pounds of tax relief "out of thin air". |
| Plans to pursue a second appeal against HMRC come despite MPs on the Public Accounts Committee citing the pub group's scheme as one example of "an illegitimate game to outwit the taxpayer". Conservative committee member Richard Bacon suggested it was "purely artificial". | Plans to pursue a second appeal against HMRC come despite MPs on the Public Accounts Committee citing the pub group's scheme as one example of "an illegitimate game to outwit the taxpayer". Conservative committee member Richard Bacon suggested it was "purely artificial". |
| Speaking after Greene King issued a trading update to investors yesterday, chief executive Rooney Anand confirmed that he planned to take his appeal to the upper-tier tax tribunal, after an initial legal challenge to HMRC's position on the tax scheme, known as Project Sussex, had failed. | Speaking after Greene King issued a trading update to investors yesterday, chief executive Rooney Anand confirmed that he planned to take his appeal to the upper-tier tax tribunal, after an initial legal challenge to HMRC's position on the tax scheme, known as Project Sussex, had failed. |
| Anand said he was disappointed to be asked questions about tax yesterday, and would have preferred to discuss the group's latest sales figures. "There is so much bad news. Greene King is trying to do the right thing by its investors, its customers and its people. You've used this opportunity to hit me over Project Sussex." | Anand said he was disappointed to be asked questions about tax yesterday, and would have preferred to discuss the group's latest sales figures. "There is so much bad news. Greene King is trying to do the right thing by its investors, its customers and its people. You've used this opportunity to hit me over Project Sussex." |
| Asked if he was risking a Starbucks-style boycott of pubs and beer brands – including Abbott Ale, Greene King IPA and Old Speckled Hen – the brewery boss said: "I thought I was ringing the Guardian. You're behaving like a tabloid journalist, with respect ... I think you've behaved dishonourably." | Asked if he was risking a Starbucks-style boycott of pubs and beer brands – including Abbott Ale, Greene King IPA and Old Speckled Hen – the brewery boss said: "I thought I was ringing the Guardian. You're behaving like a tabloid journalist, with respect ... I think you've behaved dishonourably." |
| He later added: "To accuse Greene King of being corporate tax dodgers à la Starbucks, Google, etc was a total surprise and a shock. It's an insult to a 214-year-old company that is trying to prevail under the most difficult conditions – with some success, I might add – and that has paid many hundreds of millions of pounds in tax over the years." | He later added: "To accuse Greene King of being corporate tax dodgers à la Starbucks, Google, etc was a total surprise and a shock. It's an insult to a 214-year-old company that is trying to prevail under the most difficult conditions – with some success, I might add – and that has paid many hundreds of millions of pounds in tax over the years." |
| Prem Sikka, professor of accounting at the University of Essex, said: "Hopefully people will show their anger and boycott the products of Greene King and Ernst & Young [the accountancy firm that devised and marketed the scheme]". | Prem Sikka, professor of accounting at the University of Essex, said: "Hopefully people will show their anger and boycott the products of Greene King and Ernst & Young [the accountancy firm that devised and marketed the scheme]". |
| Project Sussex was among several examples singled out by MPs which, they believedm showed engagement in what PAC chair Margaret Hodge called a "neverending game of cat and mouse", as accountancy firms sought to exploit tax loopholes before they were closed. | Project Sussex was among several examples singled out by MPs which, they believedm showed engagement in what PAC chair Margaret Hodge called a "neverending game of cat and mouse", as accountancy firms sought to exploit tax loopholes before they were closed. |
| Lawyers for HMRC claim that Greene King, which owns 2,300 pubs, including the Hungry Horse and Loch Fyne restaurant chains, received tailored tax advice from Ernst & Young suggesting it could build a series of transactions between companies within the same group that would leave it with a tax advantage. | Lawyers for HMRC claim that Greene King, which owns 2,300 pubs, including the Hungry Horse and Loch Fyne restaurant chains, received tailored tax advice from Ernst & Young suggesting it could build a series of transactions between companies within the same group that would leave it with a tax advantage. |
| In a judgment handed down by the first-tier tax tribunal last summer, it was confirmed that Greene King knew "the true underlying purpose of the transactions [was] as a means, if it succeeded, of generating relief for the payments of interest made without corresponding liability to tax on the receipts". | In a judgment handed down by the first-tier tax tribunal last summer, it was confirmed that Greene King knew "the true underlying purpose of the transactions [was] as a means, if it succeeded, of generating relief for the payments of interest made without corresponding liability to tax on the receipts". |
| Counsel for HMRC David Milne QC put it more starkly: Project Sussex was "a scheme for making what would otherwise be taxable income vanish into thin air". He had told the tribunal that E&Y had proposed "transactions ... structured in the curious way ... in order to attempt to take advantage of a perceived loophole in the loan relationships legislation so as to achieve a tax mismatch within the Greene King group." | Counsel for HMRC David Milne QC put it more starkly: Project Sussex was "a scheme for making what would otherwise be taxable income vanish into thin air". He had told the tribunal that E&Y had proposed "transactions ... structured in the curious way ... in order to attempt to take advantage of a perceived loophole in the loan relationships legislation so as to achieve a tax mismatch within the Greene King group." |
| He suggested it was "in truth no more than a tax-saving device, one moreover in which E&Y was to share, by taking a percentage of the tax saved by its adoption." E&Y separately acted as auditor to Greene King. | He suggested it was "in truth no more than a tax-saving device, one moreover in which E&Y was to share, by taking a percentage of the tax saved by its adoption." E&Y separately acted as auditor to Greene King. |
| HMRC issued "amendment notices" in relation to Greene King group companies three years ago, effectively blocking Project Sussex. Anand has been fighting these notices ever since. | HMRC issued "amendment notices" in relation to Greene King group companies three years ago, effectively blocking Project Sussex. Anand has been fighting these notices ever since. |
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