Matalan chief sues PwC claiming beancounter gave him bad advice over Monaco tax haven bill
Matalan tycoon John Hargreaves is suing PwC over claims the accounting firm gave him bad advice before he relocated to Monaco over how he would be able to avoid tax.
The 76-year-old businessman, who has an estimated fortune of £550million, moved to the tax haven after his company floated on the stock exchange in 1998.
He thought he could avoid paying capital gain and income taxes when he sold £237million worth of shares in the retailer almost 20 years ago.
Matalan tycoon John Hargreaves thought he could avoid paying capital gain and income taxes when he sold £237m worth of shares in the retailer almost 20 years ago
But he has now accused PwC of negligence in the High Court after HM Revenue & Customs still pursued him for millions of pounds in unpaid tax, claiming he was still a UK resident.
Hargreaves paid £35million two years ago but faces demands for another £135million.
He says he relied on PwC expertise and was exposed to an ‘exceptionally high amount of tax’ as a result of its failure to advise him properly.
Court hearings resumed this week, with PwC seeking to quash the case on technical grounds.
It comes as the accountant is also fighting claims it negligently signed off the books of Providence Investment Fund before a massive ‘Ponzi scheme’ was uncovered that left investors short of £40million.
Hargreaves was targeted by HMRC in 2004 after it emerged he was still working at Matalan’s Liverpool head office three days a week and sleeping at his UK house. The tycoon claims PwC advised him that it was possible to do this while a Monaco resident.
His lawyers have claimed that because of PwC’s advice he believed his actions were ‘proper legitimate and effective’, according to the Financial Times.
One of eight siblings, Hargreaves grew up in Liverpool and left school at 14. He built a business empire that by the 1990s had more than 90 stores.
His fortune allowed him to adopt a glamorous lifestyle, with the tycoon said to have travelled by private jet from his Monaco home to the UK.
The tycoon also bought a mansion in Barbados.
Hargreaves passed on management of Matalan to son Jason, 51, in 2013. It made a profit of £30million after sales of £1.1billion last year.
Hargreaves and Matalan declined to comment on the court case.
PwC said: ‘We believe this claim will ultimately fail and are seeking to strike out aspects of it.’