It seems that Friday 13th is unlucky for some as a tribunal has ruled that security firm G4S cannot reduce its profits for tax purposes by deducting parking fines.
Corporation tax bill claim rejected
The company, G4S Cash Solutions, tried to reduce their corporation tax bill by approximately £580,000 but the first-tier tribunal has ruled in HMRC’s favour in rejecting the claim for the deduction of the fines.
The company G4S incurred a substantial amount of parking fines usually while delivering consignments of cash over the pavement. The business tried to claim these were a business expense and so could be used to reduce the company’s profits for tax purposes.
The tribunal ruled G4S staff consciously and deliberately decided to break parking restrictions for commercial gain.
Fines for breaking the law cannot reduce tax bill
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.’
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