Statement re Employment Benefit Trust Settlement

Intermediate Capital Group Plc
18 March 2015

Intermediate Capital Group Plc - Employee Benefit Trust Settlement

Intermediate Capital Group has settled a claim for taxes in respect of an Employee Benefit Trust (EBT).   In common with many financial sector companies, the Group utilised an EBT to make compensation awards to employees between the financial years ended 31 January 2003 and 31 March 2011.  The tax treatment of awards made through these structures was later challenged by HMRC and, following legislation, in 2011 HMRC launched the EBT Settlement Opportunity. As detailed in note 11 of the 2014 Annual Report, the Group participated in this opportunity and has now agreed a settlement with HMRC.

Under the terms of the settlement the participating employees will meet the income tax and employees' national insurance (NI) payable on contributions to the EBT which were allocated into dependent funds for their benefit.  The Group has settled the employer NI due which, together with other costs of the settlement including interest on late paid tax, totalled £29m. Of this, £12m had previously been accrued. 

At the time the contributions were made the Group could not claim a tax deduction against the cost, increasing the Group's effective tax rate at the time. Under the terms of the settlement the contributions to the EBT can now be treated as employment expenses. As a result, a corporate tax deduction is now available. The corporate tax credit in respect of settled contributions is £38m and will be recognised in the current financial year. 

The Group confirms that all amounts payable to Directors were disclosed in the relevant remuneration committee reports.

Analyst / Investor enquiries:

Ian Stanlake, Investor Relations, ICG                                                      [phone]

 

Media enquiries:

Helen Gustard, Corporate Communications, ICG                                     [phone]
Neil Bennett, Tom Eckersley, Maitland                                                    [phone]

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Source: Intermediate Capital Group plc via Globenewswire

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