PracticeAccounting FirmsRevenue backs out of M&S appeal

Revenue backs out of M&S appeal

The Inland Revenue has decided not to push ahead with an appeal against a High Court decision to refer a legal battle with Marks & Spencer over group relief.

Link: M&S Court case begins

The surprise decision has led European tax experts to believe the Inland Revenue, and the UK judiciary, is resigned to the growing power of Europe over UK tax affairs.

Observers believe the decision by Justice Parks earlier this month to refer the case to the ECJ indicates resignation in the face of EU tax law. ‘He was clearly saying that EU law is developing and there?s no point in giving a judgement,’ said Christopher Morgan, a partner in the European tax department of KPMG.

M&S is claiming it is owed £30m in overpaid corporation tax because it was not allowed to offset loses sustained in European subsidiaries against UK-earned profits.

Experts now believe that an urgent debate is needed about how the government should respond to the growing influence of Europe in tax matters.

‘The last thing we want is a knee-jerk reaction that says, for example, to stop Marks & Spencer type claims we are going to abolish group relief within the UK. All that will do is damage business already here and deter people from setting up in the UK,’ said Morgan.

Despite this, observers believe the case is good news for corporate taxpayers because it demonstrates they should not be deterred from making claims against the Revenue.

A spokeswoman for the Inland Revenue said that while it has decided not to appeal the decision, it will defend the case ‘vigorously’ at the ECJ on the grounds that it is correct and ?UK regulation is not contrary to European law’. The case is expected to be heard by the ECJ, mid 2004.

Related Articles

BDO’s global revenues pass $8bn

Accounting Firms BDO’s global revenues pass $8bn

4d Alia Shoaib, Reporter
Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

Accounting Firms Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

6d Philip Smith, Reporter
Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

Accounting Firms Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

1w Emma Smith, Managing Editor
BDO reports revenue growth of 5.7%

Accounting Firms BDO reports revenue growth of 5.7%

2w Alia Shoaib, Reporter
Taylorcocks announces merger with Surrey firm

Accounting Firms Taylorcocks announces merger with Surrey firm

2w Emma Smith, Managing Editor
Kingston Smith reports 7% gender pay gap

Accounting Firms Kingston Smith reports 7% gender pay gap

2w Emma Smith, Managing Editor
RSM announces two partner promotions

Accounting Firms RSM announces two partner promotions

3w Emma Smith, Managing Editor
Backsourcing: The latest accountancy trend?

Accounting Firms Backsourcing: The latest accountancy trend?

1m Pillsbury Winthrop Shaw Pittman