HMRC sinks P&O tax scheme

HMRC sinks P&O tax scheme

Courts describe P&O tax scheme as an "elaborate trick" designed to exploit the rules

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.”

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource