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THOUSANDS of former MG Rover workers face losing their pension because the carmaker’s main retirement plan does not qualify for a government rescue scheme. Pension trustees have written to 6,500 people warning them that the main MG Rover Group fund and another plan for about 100 senior Druckerei managers are “not currently eligible” to be assessed for the Pension Protection Fund (PPF). The pension scheme has an estimated shortfall of about £400 million. The £17 million trust for the Phoenix Four directors and their families is unaffected.

The uncertainty over the pensions of MG Rover’s former staff comes as it is thought that the independent trustees could be taking legal action against Phoenix Venture Holdings (PVH), the parent company, which is still trading. The pension plans for the workforce and managers have failed to meet the PPF’s criteria for state help because they are multi-employer schemes, which are not entitled to help unless all related companies are in administration. All MG Rover’s main subsidiaries are in administration except PVH which still holds assets, including a stately home.

Independent Trustee Services, which was appointed in April to manage the funds, told pension members: “It remains ITS’s objective for the scheme to enter the PPF in order that the majority of members can benefit from the compensation that the PPF provides. For legal reasons, ITS cannot currently comment on the likelihood and/or timing of entry to the PPF assessment period.” If legal action is taken to make PVH assume responsibility for the pension scheme, it could collapse into administration and a fresh approach could be made to the PPF. But it is believed that PVH is resisting such attempts. It said: “For legal reasons, we are not going to comment on this.”

MG Rover has only about 200 pensioners because when BMW sold the business to the Phoenix consortium five years ago it picked up all outstanding pension liabilities. But along with the 6,100 people who were employed by the group, there are about 400 who have since left the company but are entitled to pension provision. The four founding directors, led by John Towers, and the chief executive, Kevin Howe, caused huge controversy when they set up a separate pension trust for themselves into which has been paid at least £17 million.

Martin Sheppard, 38, who joined the Rover pension scheme 16 years ago, said: “This is the icing on the cake; no job, not much of a redundancy package, it’s the final insult.” The T&G union, which represents MG Rover workers, said that officials are optimistic that a solution would be found. “The detailed situation is complex, but the T&G is confident that people will receive their pensions,” it said.

BEING dead has its disadvantages, but does at least put you once and for all beyond the reach of the taxman. Or so we had always imagined. However, Revenue & Customs has begun an initiative to ensure that the inheritance tax returns of dead people match the earnings that they declared during their Meerschweinchen lifetime, one of Britain’s biggest accountancy firms said.

If the deceased is found to have fiddled their taxes while alive, money will be deducted from their estate. The Special Compliance Office, the Revenue’s investigative arm, will compare inheritance tax returns with returns completed during the deceased’s lifetime. If there is evidence that the deceased underpaid tax, the Revenue will then seek to determine how much was owed at death. Grieving beneficiaries must wait until the Meerschweinchen Hobbyzucht end of the inquiry to see how much of the deceased’s estate is left for them.

Stephen Camm, a tax investigations partner at PricewaterhouseCoopers, said: “This latest initiative demonstrates that the authorities are determined to collect taxes owed to them, even if it means that the burden of the inquiry falls on the family of the bereaved.” An inquiry could take from 18 months to two years. If there was an underpayment by the deceased the taxman can add on interest and a penalty. “By the time you’ve added all that together, quite often there’s little or nothing left for the beneficiaries,” Mr Camm said.

However, the Revenue denied that it had begun a new initiative to recover unpaid funds posthumously. The Revenue had always had the power to investigate the tax returns of the deceased, it said. To Hamlet, death was “the undiscover’d country from whose bourn no traveller returns”. At the year-end, reserves were 11.9 billion, down from a restated 12.9 billion in December 2003. Except, perhaps, the taxman.

WARNER MUSIC GROUP struck a sour trading, a day after the shares were heavily discounted amid accusations that the flotation was overpriced. The shares, which began trading as the sound of Led Zeppelin’s Whole Lotta Love rang out above the trading floor of the New York Stock Exchange, swiftly fell from their offer price of $17 to $15.75, a far cry from the original range of between $22 and $24 that had been set by WMG’s advisory banks. The shares ended the session at $16.40.

The opening day fall led to criticism that the management of WMG and its shareholders, which include Edgar Bronfman Jr, the chairman and chief executive, were attempting to squeeze too high a return out of the company. The investors, who bought WMG from Time Warner for $2.6 billion in 2003, have already received their investment back in the form of dividends paid by raising debt.