Lloyd's members have been warned they could miss out on a substantial tax windfall if they fail to contact the Inland Revenue, writes Mike Cooper.
The market's 4,700 names and 660 corporate members are owed a total of £350 million in back taxes following a legal victory. The overpayments are potentially worth an average of £65,298 to each Lloyd's member.
Earlier this month, Wellington's non-marine Syndicate 1095 successfully challenged a ruling by the Inland Revenue that Lloyd's syndicates should discount the value of reinsurance to close premiums for tax. The taxman had insisted syndicates should take account of the time lag before liabilities fall due on Lloyd's three-year accounting cycle. However a tax tribunal disagreed.
The Inland Revenue has since announced it will be reviewing the self-assessment tax returns of Names. But it has only until the end of January 2000 to issue such notices.
This means Lloyd's names should notify the Inland Revenue of their claims before December 31, 1999.
Tax advisers Pannell Kerr Foster stressed the importance of this timing: “Names should claim sooner rather than later. If the Inland Revenue does not issue enquiry notices before the end of next January, names could end up losing their repayments or in some cases tax losses could be brought forward.”