Irish Gas Company Faces £36 Million UK Tax Charge

by Caroline Maxwell, Tax-News.com, London

12 November 2001

It has been revealed that Bord Gais, which owns the gas interconnector across the Irish Sea which imports some 70% of the country's gas, is facing a £36 million unpaid tax bill from the UK Inland Revenue.

The IR is claiming that the company's UK subsidiary was not entitled to claim certain capital allowances on the construction cost of the line, and although a Bord Gais spokesman said last week that the company is confident of a favourable outcome, resolution of the claim, which has just started to make its way through the courts, could take some time.

According to reports, Bord Gais is looking to build a second interconnector, as the first (IC1) is working at almost full capacity. In order to do this, however, the company may be forced to sell a share in IC1, a transaction which would undoubtedly be complicated by the existence of the sizeable tax liability. As a result, there is speculation that despite its confidence, the Irish gas supplier may end by settling the claim out of court.

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