Tax Tribunal upholds rule that fines for breaking the law cannot reduce a tax bill

Posted on

20 April 2016

Security firm G4S cannot set its parking fines against its tax bill, the tax tribunal ruled today.

G4S Cash Solutions aimed to reduce their corporation tax bill by around £580,000 but the first-tier tribunal has ruled in HMRC’s favour in rejecting the bid.

G4S incurred parking fines usually while delivering consignments of cash over the pavement. The firm claimed these were a business expense and so could be used to reduce its profits for tax purposes.

The tribunal ruled G4S staff consciously and deliberately decided to break parking restrictions for commercial gain.

The ruling upholds HMRC’s long standing view that fines for breaking the law cannot be used to reduce a tax bill.

HMRC’s Director General of Business Tax, Jim Harra, said:

“We’ve always said fines incurred for breaking the law are not tax deductible.

“The tribunal has now established a clear precedent for rejecting any future such claims.”

HMRC Press Release here



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