Official Enquiry Launched Into Inland Revenue/Mapeley Steps Affair

by Jason Gorringe, Tax-News.com, London

24 March 2003

The UK National Audit Office (NAO) has launched an official enquiry into the Inland Revenue's dealings with Bermuda-based company Mapeley Steps over the sale of 600 buildings under a private finance initiative (PFI) scheme.

In March 2001 the Inland Revenue claimed that it had sold the buildings to a British-based sister company called Mapeley Limited for £220 million. However, eighteen months later, the Revenue revealed that it had actually sold the buildings to Mapeley Steps, which trades under the tax regime of Bermuda. The revelation attracted fierce criticism of IR chairman Sir Nicholas Montague and allegations of double standards by the Revenue, which was seen to be profiting from a company actively employing tax minimisation techniques.

Confirming that the (NAO) had taken up the case, a spokesman revealed to BBC News Online that the matter was no longer a "watching brief", and that the enquiry which is due to be completed by the end of the year is now "formally underway". An official from the Inland Revenue said in turn that they were looking forward to helping the NAO in their examination of the affair.

An earlier probe into the IR's dealings with the Bermudan company by the Treasury Select Committee in December caused MPs to be "astonished and seriously concerned" by the Revenue's actions, and they alleged "serious failures" on the part of IR officials.

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