P&O HAS LOST out in £14m in tax relief after the taxman successfully challenged its use of a complex scheme to avoid paying tax.
The British shipping and logistics company, which owns P&O ferries among other maritime companies, had tried get the tax relief by artificially boosting the credit due for tax paid on dividend income.
However, the scheme was thrown out by the first-tier tribunal, which ruled that the transactions were all part of an “elaborate trick” designed to exploit the rules.
The tribunal ruled: “It is clear that the scheme would only work so long as every participant in it was either a captive company or a stooge employee of a company within the P&O group.”
It also found that it was “designed and implemented for no reason other than tax avoidance.”
David Gauke, exchequer secretary to the Treasury, said: “I’m delighted that HMRC has successfully defeated this attempt by a major company to artificially reduce its tax bill by exploiting an extremely complex international financial structure.
“The government has made it very clear that we won’t put up with aggressive tax avoidance and we have resourced HMRC to take on even the most complex and convoluted schemes, as this tribunal decision shows.”
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