McLaren fine is tax deductible
The McLaren Formula One motor racing team has successfully argued that a £34m fine it had to pay for cheating is tax deductible.
The fine was imposed because McLaren “had possessed and in some way used proprietary information belonging to Ferrari, and had thereby breached the rules of the PIA’s International Sporting Code to which McLaren was contractually bound.”
The tribunal held that the find was a business expense on the basis that it was not a fine for breaking the law, rather it was a penalty incurred under the F1 rules.
The Judge held that looking at the trade, the only reason McLaren was fined was because they had signed up to the Concorde agreement, which allowed them to participate in F1, and therefore it was a fine related to that trade.
HMRC is currently considering whether or not to appeal in due course – my money is on them appealing!
Date: 7th November, 2012
Articles from this Author
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole