TaxCorporate TaxM&S may win £30m from Revenue

M&S may win £30m from Revenue

A High Court case in which Marks & Spencer could win £30m compensation from the Inland Revenue begins on Tuesday.

Link: Revenue accused in M&S case

The high street retailer is appealing against a Revenue special commissioner?s decision, which ruled the company could not offset losses made in European subsidiaries against UK profits.

David Evans, a director of international tax at Ernst & Young, who worked on the case while at KPMG, said he expects the High Court to refer the case to the European Court of Justice. ‘They will do a lot better at the High Court than they did at the special commissioners,’ said Evans. Once at the ECJ, he expects M&S to win.

Evans said it was in the government’s interest for the case to be referred to Europe, because it would allow it to introduce counter legislation. ‘The sooner [the government] knows what the answer is, the sooner it can get its law compliant with EU law. The UK could have a law which said: “We’ll give you relief for the loss, but reinstate the profits when the loss-making subsidiary becomes profitable”.’

Peter Cussons, international tax partner at PwC, which is advising M&S, believes the Revenue will be soundly beaten when it appears in front of the ECJ.

‘The conclusion is disputable. Not all the relevant case law was considered and some was arguably misconstrued,’ he said at the time of the original decision.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

2m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

2m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

4m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

5m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

8m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter