Marks & Spencer will take its landmark £100m tax case with the Inland Revenue to the European Court of Justice on 1 February, Accountancy Age has learned.
The struggling high-street retailer will argue that it should be able to offset losses of more than £100m, incurred in subsidiaries based in France, Belgium and Germany, against its UK profits.
If it is successful, it will be owed £30m by the Revenue. More than that, an M&S victory should ease hundreds of other company group claims in and around the loss-relief group litigation order (GLO), which comprises some of the world’s largest companies including Asda, Lloyds and BT.
A spokeswoman for M&S, which is still looking for a successor to finance director Alison Reed who steps down early next year, confirmed the case was due to be heard on 1 February.
And in what is a double whammy for the Revenue, a separate GLO against the government was referred to Europe last week by Mr Justice Park.
The so-called thin-cap litigation was referred directly to the ECJ last Thursday and contains some 15 companies, including Pepsi, Volvo and IBM.
The thin-cap case, of which Dorsey & Whitney is the lead and test case solicitor, is one of six GLOs currently at various stages of litigation. Ultimately the thin-cap litigation could cost the government well over £100m, with the overall cost of the GLOs estimated to be in the region of £20bn.
All of the GLOs claim UK tax law is in some way contrary to EC rules.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states