Infosys embroiled in £20m UK Tax Dispute

Infosys, the firm founded by Rishi Sunak’s father-in-law NR Narayana Murthy, is embroiled in a £20 million dispute with the UK tax authorities.

The company, founded in Pune, is a multinational information technology company that provides business consulting, information technology and outsourcing services.

It is reported that Infosys and HMRC disagree over a corporation tax bill of approximately £20 million.

The dispute is one of several tax issues the company has in a range of jurisdictions, including Australia.

Large tax disagreements that could affect a company’s operations or profits often have to be disclosed to shareholders and regulators.

Infosys is publicly listed in India and New York.

A spokesperson for the company said:

“Infosys provides details of certain ongoing disputes with various regulatory authorities, including this specific tax matter with HMRC.

“The company has filed an appeal against a tax assessment in the UK and has obtained a stay on the payment of the tax demand from HMRC.”

NR Narayana Murthy is no longer involved in the direct management of Infosys, after resigning from a senior role in 2014.

Nandan Nilekani is the current chairman while the CEO is Salil Parekh.

Rishi Sunak’s wife Akshata Murthy holds a stake that is just under one per cent.

Although she is not involved in running the company, she retains shares worth almost £700 million, which form a large share of the Sunaks’ family wealth.

These have earned her tens of millions of pounds in dividends in recent years.

The tax dispute comes at a sensitive time for Mr Sunak, who recently sacked the Tory party chair, Nadhim Zahawi, because of a breach of the ministerial code tied to a tax penalty.

Mr Sunak is still facing scrutiny over his handling of the affair.

In April 2022, it was also revealed that Akshata Murthy saved millions of pounds while living in 11 Downing Street by using nom-dom status to minimise her tax bill.

The tax break, which costs thousands of pounds to maintain, means that a person can be a UK resident but only pay tax on the British income, rather than worldwide.

Akshata resigned her non-dom status for income tax purposes shortly afterwards.

It is possible to retain the benefits of non-dom status even after it has expired or been resigned via an offshore trust.