Begbies Traynor settles civil case over alleged ‘tax avoidance’ scheme

Manchester-based insolvency specialist, Begbies Traynor, has reached a settlement in a multimillion-pound civil case with former clients over what they described as a “highly aggressive” tax avoidance scheme.

The firm, together with accountancy practice Townsend Harrison, defended the case against three companies and their directors who sued them for “incompetently” recommending “restructuring arrangements” to reduce tax liabilities.

The claimants were seeking £2.6m in losses and damages, but the terms of the settlement have not been disclosed.

Begbies said it was “fully defended” in the case, which it described as extremely “technical”, and denied all claims throughout the proceedings.

Townsend Harrison has previously disputed the claims.

The case related to employee benefit trusts the companies were allegedly advised to form to reduce employee income tax and National Insurance payments.

The claimants were two recruitment agencies, Premier and Royle, and knitting yarn importer, Super Sew.

However, HM Revenue & Customs began an investigation in 2014.

The claimants entered settlement agreements with HMRC in 2020, which were reportedly bigger than the original liabilities.

Begbies has denied recommending or having any involvement in the disputed arrangements. A spokesperson told TheBusinessDesk.com: “The proceedings have been brought to an end on confidential terms and no regulatory inquiry, disciplinary investigation or complaint has been made in relation to the conduct of any of Begbies Traynor’s practitioners.”