More NewsECJ tide turns as M&S ruling limits tax claims

ECJ tide turns as M&S ruling limits tax claims

M&S victory has not brought the expected blow to the taxman and indicates a more sympathetic ECJ

Claims that corporates could claim billions of pounds back from the Exchequer
suffered a severe blow at the European Court of Justice this week, as companies
were allowed to claim group reliefs, but only in a heavily circumscribed way.

The ECJ ruled on the Marks & Spencer case, deciding that, although the
UK’s group relief system was ‘disproportionate’, companies could claim group
relief only where they had not, or could not, claim it elsewhere.

It had been assumed that the case could blow a multibillion-pound hole in the
UK’s budget plans, but the detail and tenor of the court’s verdict suggested a
move away from rulings in favour of the taxpayer, a traditional feature of ECJ
direct tax cases.

Sean Finn, tax lawyer at Lovells, said the court had rejected the ‘principle
regarding the total disregard of borders’, in adopting the double-dipping
proviso.

The issue of ‘double-dipping’ was crucial to the verdict, and experts said it
would severely limit claims. The ruling said that reliefs would only apply if
‘the non-resident subsidiary had exhausted the possibilities available in its
state of residence’.

Related Articles

Amazon UK halves its corporation tax bill despite increased turnover

More News Amazon UK halves its corporation tax bill despite increased turnover

4m Alia Shoaib, Reporter
Increase in UK business confidence despite Brexit, according to ICAEW

More News Increase in UK business confidence despite Brexit, according to ICAEW

7m Alia Shoaib, Reporter
Live blog: Spring Budget 2017

Corporate Tax Live blog: Spring Budget 2017

9m Accountancy Age editorial
The Curious Incident of the Insolvency Sector in the Light of Economic Turbulence

Insolvency The Curious Incident of the Insolvency Sector in the Light of Economic Turbulence

11m Accountancy Age editorial
Leonard Curtis called in as administrators for builders Boshers

Legal Leonard Curtis called in as administrators for builders Boshers

11m Stephanie Wix, Writer
New Year Honours of 2017

Accounting Standards New Year Honours of 2017

11m Stephanie Wix, Writer
"Not enough time" to implement MTD by 2018, says Tyrie

Corporate Tax "Not enough time" to implement MTD by 2018, says Tyrie

1y Stephanie Wix, Writer
Colin: A spoonful of investment...

Governance Colin: A spoonful of investment...

1y Stephanie Wix, Writer