General Electric Hit By $1 billion UK Tax Bill
General Electric is in big trouble with Queen Elizabeth.
As The Times reports, the U.K.’s tax authority, Her Majesty’s Revenue and Customs, is looking into tax paid in the country by the American conglomerate going back to 2004 – and they’re coming up $ 1 billion (£770 million) short. The shortfall comes from an interest deduction claimed by GE Capital, GE’s financial services arm, between 2004 and 2015 that HMRC is retrospectively disallowing.
“This is money that would otherwise have gone unpaid,” a spokesman for HMRC told The Times. “We make sure that large businesses, like everyone else, pay all the taxes due under UK law and we don’t settle for less.”
In a response filed to the Securities and Exchange Commission, GE said it intended to fight HMRC’s decision. “If assessed, we intend to contest the disallowance,” said the filing. “We comply with all applicable tax laws and judicial doctrines of the UK.”
GE isn’t the only American business to have recently run into tax trouble in the U.K. Earlier this year, Apple was forced to pay an extra $ 176 million (£136 million) after an HMRC investigation. Starbucks, Amazon, and Facebook have also come under fire for low tax bills in the UK. The government recently announced a new digital services tax that aims to correct for the tax practices of some tech firms.
GE is also facing trouble this side of the pond. The company is facing widening investigations by the Securities and Exchange Commission and the Department of Justice over a $ 22 billion accounting writedown of GE Power. The announcement of those investigations came in the same week the company announced a $ 22.8 billion loss for the third quarter and a dividend cut from $ 0.12 to $ 0.01 per share, winding down a tumultuous year at the company.
