Schroders makes £15m tax provision

SCHRODERS has set aside millions of pounds to cover potential fines arising from a US investigation into banks that helped US customers avoid taxes.

In its annual report, the FTSE 100 fund manager said it had set aside £15m for a possible penalty payable in connection with the US Department of Justice investigation.

Announced in August last year, the investigation applies industry wide to Swiss banks in order to identify accounts related to clients who may not have been US-tax compliant.

Schroders said the provision was set aside for its Swiss bank, which is participating voluntarily in the programme.

“Where a Swiss bank is unable to provide fully sufficient evidence that a client is compliant, a penalty may be payable. This programme is expected to complete in 2014 or 2015 and there is uncertainty as to the extent of any payment required by Schroders,” the fund manager said in its annual report.

The group has established a provision, which relates principally to closed accounts, based on a review of relevant accounts which existed on or after 1 August 2008.

“There is uncertainty mainly in respect of the range of probabilities applied to relevant accounts which will only become certain following the conclusion of the DOJ’s analysis of the Swiss bank’s submission of its evidence. As a result, the actual payment is expected to vary from the amount provided,” Shroders said.