F1 team McLaren denied tax relief for fine
£32m fine for corporate espionage not tax deductible, tribunal finds
£32m fine for corporate espionage not tax deductible, tribunal finds
ONE OF FORMULA ONE’s most successful teams McLaren has been told a £32m fine imposed by the sport’s governing body FIA is not tax deductible.
The fine was imposed in 2007 for breaching the FIA’s code after it emerged the team was caught trying to spy on rival Ferrari, according to an investigation.
McLaren took legal action after HM Revenue & Customs (HMRC) disagreed that it could deduct the fine in computing its taxable profits. However, a tax tribunal has now supported HMRC’s view.
A first-tier tribunal ruled the penalty was tax deductible. However, the upper tribunal has now supported HMRC’s appeal against that decision by ruling the penalty was not incurred wholly and exclusively for the purposes of McLaren’s trade and so was not an allowable deduction for tax.
HMRC director-general for business tax Jim Harra said: “We’re very pleased the Upper Tribunal agrees that the fine should not be given tax relief, which supports our view that most fines are not allowable as deductions against trading income.”
“This case shows that we won’t hesitate to go to court to make sure the right tax is paid.”
More about:
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceAs the Spring Budget approaches, dissenters of the UK government’s increasingly complex contractor legislation are baying for change. HMRC has already...
View articleStricter controls on VAT compliance is set to shut down the “colossal” VAT tax gap. Read More...
View articleThere has been a percentage increase in the number of claims made by companies, but more needs to be done Read More...
View articleThe Targeted Anti-Avoidance Rule was introduced to prevent individuals lowering their tax liability by converting what would otherwise be a dividend i...
View articleIn 2016-17, the average length of time to settle a tax investigation rose to 34 months, up from 31 months in 2015-16. The tax authority has also incre...
View articleDiverted profits tax revenue collected by HMRC in 2016-17 totalled £281m, leaping from £31m collected in the previous year, according to data released...
View articleThe report suggests a wide range of reforms focussed on bringing together corporation tax and accounts, including creating five year roadmap for CT re...
View articleIn 2012, HMRC made 591 requests to foreign governments. In 2016, this number stood at 1096, a 7% increase on 1025 requests made in 2015 Read More...
View article