Feeds

MPs question Inland Revenue over C&W tax deal

Flogs some Euro biz

  • alert
  • submit to reddit

Boost IT visibility and business value

Cable & Wireless today announcing that it's got "its" £1.5 billion, set aside to cover a secret potential tax liabilities, back from escrow.

At the same time, members of the House of Commons Treasury Select Committee are asking the Government some searching questions over the tax deal brokered with C&W, which saw the firm escape from its escrow fiasco in return for a full settlement of £380 million.

C&W fessed up to the secret prospective tax liability
in December when its credit rating was cut to junk status by Moody's. This triggered a provision to set aside £1.5 billion in escrow to cover liabilities inserted into the £3.5 billion sale of C&W's half-share in One2One (now the UK arm of T-Mobil) to Deutsche Telekom in 1999. C&W put the money into escrow in January, so it is a tribute to its negotiating skills that it escaped so quickly, and so lightly.

Norman Lamb, Lib Dem Treasury spokesman described the £380 million payment as "an unreasonably low sum" and has written to Gordon Brown, the Chancellor, and Sir Nicholas Montagu, head of the Inland Revenue, seeking an explanation, the Daily Telegraph reports.

"I would like to know whether this is a done deal or whether we can re-open the case," Lamb told the paper.

"We need reassurance about this settlement in the light of the £1.5 billion originally ring-fenced by the company to cover it.

"Such a wide discrepancy raises a lot of doubt about the ability of the Revenue to clamp down on tax avoidance at a time when the public finances are being stretched by the war in Iraq."

And if that wasn't enough excitement for one day, C&W is also flogging its domestic ops in Northern Europe (in Belgium, the Netherlands, Sweden and Russia) to an MBO team and its Swiss domestic ops to Smart Telecom. C&W will continue to provide network infrastructure services to IP-eYe, the vehicle for the MBO team. Prices are undisclosed. ®

Related Story

US investors sue C&W over secret £1.5bn liability

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.