Supposed tax avoidance

[wedge]

Let's not bother with F1 any more:

BBC News - Today - McLaren £49m 'cheat' fine is tax deductible

[SGWilko]

Let's not bother with F1 any more:

BBC News - Today - McLaren £49m 'cheat' fine is tax deductible

Business expense. Good luck to them.

However, if they operate from an offshore address then boo and hiss.

[Malbec]

Let's not bother with F1 any more:

BBC News - Today - McLaren £49m 'cheat' fine is tax deductible

Would they have incurred that fine if they weren't involved in F1?

[Rollo]

Would they have incurred that fine if they weren't involved in F1?

That is the general question involved here. The courts decided that they would not.

Income and Corporation Taxes Act 1988
[i]Section 74
General rules as to deductions not allowable
Subject to the provisions of the Tax Acts, in computing the amount of the profits or gains to be charged under Case I or Case II of Schedule D, no sum shall be deducted in respect of—
(e)any loss not connected with or arising out of the trade, profession or vocation;
Income and Corporation Taxes Act 1988

The £49m is obviously directly connected with generating an income. That is not a very difficult statement to prove I would wager.

"We are accepting that businesses can behave improperly and be rewarded in a sense for it"
- Gordon Farquhar, 11 Oct 2012
BBC News - Today - McLaren £49m 'cheat' fine is tax deductible

Well duh.

Financial institutions write off all sorts of loans that they should never ethically have lent out, parking fines are normally deductible in the hands of delivery companies and I forget where but there is a case which a prostitute successfully argued according to ICTA 88 that certain assets have an estimated life and that there should be an allowable deduction for depreciation on them.
Even income which is subject to the Proceeds of Crime Act 2002 might be defined as assessable or " "taxable income" under ICTA 88 and as such, expenses incurred in generating that income are deductible - petrol used in the getaway car in a bank job, for instance.