Britannia may face £20m bill after tax swoop

Britain's second biggest building society, Britannia, could be hit with a £20m tax bill following a raid by Revenue & Customs, according to press reports.

The raid on the society's headquarters in Leek, Staffordshire , took all 1,900 employees by surprise, including chief executive Neville Richardson, said reports in the Financial Mail.

It is believed the Revenue's probe is focused on a series of multimillion pound foreign currency transactions that the society conducted in 2002. Many such deals, arranged by Britannia on advice from accountancy firm Pricewaterhouse-Coopers, were set up to reduce the society's corporation tax bill.

Following the raid, Britannia issued a statement to the Stock Exchange to reassure customers that their money was safe.

Richardson told the Financial Mail: "We are genuinely disturbed over what the Revenue has done. We have been in correspondence with the Revenue for four years on this issue and we thought we had the matter in hand."

He added that Britannia had the financial reserves to cope with any tax hit.