KPMG has reportedly been sued for over £6m by Mount Anvil over claims of an unexpected tax bill following negligent advice from the Big Four firm.
According to a legal document seen by the Financial Times, the London-based property company said that an HMRC inquiry into the tax return of one of the group’s subsidiaries in 2017 had unearthed an additional £3.9m of tax liabilities.
The sum included the loss of £3.6m in tax relief, as well as £348,000 of tax payments that otherwise would not have been owed.
Mount Anvil Group and its subsidiaries had used KPMG as its tax return preparer between 2012 and 2016.
Its claim, which was filed in the High Court in London in late March, reportedly highlighted that the Big Four firm failed to make deductions covering £49m of loans that would have reduced the group’s tax bill by availing of “group relief”.
This, combined with borrowing costs of £1.8m as a direct result of KPMG’s negligence combined to take the alleged losses to over £6m.
KPMG was also accused of incorrectly applying tax law for other deductions, therefore breaching its duties to carry out tax preparations with care, skill, and diligence.
The legal claim said, via the Financial Times: “KPMG, one of the ‘Big Four’ accounting firms, had at all times held itself out as being a specialist, providing robust tax compliance services through high calibre tax professionals supported by best-in-class process and technology.”
It added that preparing a tax return was the “minimum” of the KPMG’s professional duty, and its supposed expertise was the reason Mount Anvil had hired the company.
The lawsuit represents a further addition to KPMG’s current legal battles across a number of its business arms.
The group remains under investigation for its audit of Carillion, while its restructuring division is awaiting a tribunal decision regarding supposed conflicts of interest over its administration of Silentnight in 2011.
KPMG declined to comment on the situation, while Accountancy Today has contacted Mount Anvil for further comment.