May 21, 2020
Reading time
2 minutes
Download the article
Click here to print
Text size
aA+ aA-

Matalan founder sues PwC over tax advice

May 21, 2020

John Hargreaves, the multimillionaire founder of discount retailer Matalan, is suing PricewaterhouseCoopers (PwC) over claims the accounting firm gave him bad advice on how to avoid paying taxes when he moved from England to Monaco.


The lawsuit comes just weeks after his 232-store retail empire received tens of millions of pounds of taxpayer support and guarantees during the Covid-19 pandemic.
Hargreaves claims PwC was negligent when it advised him on the Monaco relocation that helped him avoid paying capital gains and income taxes.
The founder floated Matalan on the London Stock Exchange in 1998 and his family relocated to the tax haven in 2000 and sold £237m worth of shares in the business shortly after. But that led to a 13-year legal wrangle with HM Revenue & Customs (HMRC). And he had to pay £35m to HMRC in 2018 following a dispute. The tax authority has also continued to pursue him for a further £135m in tax and interest payments.
Hargreaves and his family have a £550m fortune, including a £250m stake in the retailer, according to the Sunday Times Rich List 2020. His eldest son Jason is chief executive of Matalan, which the family took private again in 2006. 
In filings at the London High Court this week, lawyers for Hargreaves said that he “relied” on advice from PwC and believed that he had taken the steps necessary to become a non-resident of the UK. In the court filing he said he “placed his complete trust and faith” in PwC as his tax advisers during the period.
“[Mr Hargreaves] is cautious and risk-averse in relation to tax matters. Based on [PwC’s] advice he believed his actions were proper, legitimate and effective,” the filings said. 
Hargreaves has claimed that PwC also negligently told him he was allowed to continue to work at Matalan’s UK offices and continue to “sleep at [his] UK house for two or three nights a week” despite his relocation to Monaco, according to the filings. 

It’s not the first time Hargreaves launched proceedings against PwC alleging negligent tax advice, as he did so in 2013. But that lawsuit was put on hold during the lengthy legal battle with HMRC. 

According to the Financial Times, lawyers for the professional services firm are attempting to strike out some of the proceedings on several grounds, including the amount of time that has passed since the advice was given. 

Copyright © 2023 FashionNetwork.com All rights reserved.