A tax avoidance scheme used by Stagecoach to cut their tax bill by £11 million has been stopped in its tracks.
The bus and train firm tried to avoid tax by using transactions within the Stagecoach group to artificially create a loss.
The complex artificial scheme involved moving money between companies in the Stagecoach group in an attempt to create a large loss in one company. However there was no equivalent gain in the other companies. The scheme was intended to artificially reduce Stagecoach’s Corporation Tax bill in the accounting period ending 30 April 2011.
The First-tier Tribunal ruled the scheme did not work, agreeing with all of HMRC’s legal challenges. There are 11 other similar cases which will be affected by this decision and the total tax at stake is £179 million.
HMRC Press Release is here: https://bit.ly/21Sp8eq