Matalan founder sues PwC over tax haven advice
The founder of budget fashion retailer Matalan is suing PwC, claiming the accounting giant gave him bad advice on how to avoid paying taxes in the UK when he moved to Monaco.
Multimillionare John Hargreaves said PwC had been negligent in its advice on his relocation from England to Monaco, which would have enabled him to avoid paying capital gains and income tax when he offloaded £237m of Matalan shares in 2000.
Hargreaves, who founded Matalan in 1975, said he followed PwC advice on how to move to the tax haven and sold the shares in one bulk transaction. The family still own a £250m stake in the firm, and Hargreaves’ son Jason is now the retailer’s chief executive.
However, HM Revenue & Customs ruled that Hargreaves had not given up his status as a UK resident.
Hargreaves was ordered to pay £35m in 2018, and HMRC has continued to probe his tax affairs, pursuing him for a further £135m.
He is now suing the Big Four professional services firm, the Financial Times reported.
Hargreaves reportedly claimed that PwC had advised him that he was able to continue working at Matalan’s head office and live in the UK for “two to three nights a week”, the newspaper reported.
PwC, which is attempting to strike out some of the proceedings on the basis of the amount of time that has passed since it gave the advice, told the FT: “We believe this claim will ultimately fail and are seeking to strike out aspects of the claim.”
Matalan declined to comment on behalf of Hargreaves. City PM has contacted PwC for comment.