Pinsent Masons is considering legal action against its former accountancy firm after the Inland Revenue launched an investigation into a suspected underpayment of taxes by Masons.
Legacy Masons partners have been formally notified of alleged accounting errors made over a number of years by previous accountancy firm Baker Tilly, which many expect will result in a significant tax bill.
In a prepared statement, international operations manager Tony Bunch said: “Pinsent Masons is currently in the process of resolving a historical issue regarding accounting errors and a subsequent tax underpayment. The tax advisers during the period in question were made aware of the errors. Due to possible legal proceedings we’re not in a position to comment further.”
The accounting mistakes came to light in 2003, after the firm switched from Baker Tilly to its current accounting firm Deloitte & Touche.
“[Pinsent Masons] is working closely with the Inland Revenue and their tax advisers and is doing everything possible to bring this to a swift and fair conclusion,” added Bunch.
One source told The Lawyer that legacy Masons partners were unsure of the amount of money owed, but that they were anticipating a “huge bill” running into tens of thousands of pounds.
“No one knows how much it will be, but there will definitely be a hefty bill once the inquiry is over,” the source said. “There’s absolutely nothing the partners can do about it because it’s tax owed that has to be paid. Equity partners who have been at the firm for years will be the worst hit.”
Baker Tilly International did not return The Lawyer‘s calls for comment.