Deloitte faces wrath of MPs over £70million tax scheme

ACCOUNTING giant Deloitte and Ladbrokes have been savaged by MPs after a court ruled against a complex tax avoidance scheme – hitting the bookmaker with a £70million bill.

The arrangement was thrown out by the Upper Tribunal of the Tax and Chancery Chamber after a long dispute with Revenue & Customs.

The Revenue’s director general for customer compliance, Jennie Granger, said: ‘Ladbrokes would have been better off just paying the tax but instead they pursued this lengthy legal dispute. The bookie gambled and lost when the odds of success could not have been lower.’

The scheme, devised by Deloitte, involved Ladbrokes' subsidiaries Travel Document Service and LadbrokeL Group International. It involved an artificially manufactured fall in the value of shares in one company which was used to create a loss in the other company for tax purposes. But Revenue & Customs argued there had been no real economic loss.

The case has infuriated MPs who pointed out that Deloitte is paid millions of pounds for work done for the Government.

Meg Hillier, head of the influential House of Commons PublicP Accounts Committee, said: ‘Deloitte gets so much Government money and yet it is advisinga corporates to avoid tax.’

Kwasi Kwarteng, MP for Spelthorne, said there was ‘a clear conflict’ between Deloitte’s Government contracts and its tax avoidance work.

Deloitte declined to comment. A Ladbrokes spokesman said: ‘We note the judgment and are considering our options.’