CA rules that consumer redress payments were deductible for CT purposes.
In ScottishPower (SPCL) Ltd and others v HMRC [2025] EWCA Civ 3 (17 January) the CA decided that payments made by the taxpayers to consumers and consumer organisations pursuant to agreements made in settlement of regulatory investigations were deductible in calculating the taxpayers’ trading profits for corporation tax (CT) purposes.
The taxpayers are well-known energy suppliers. Between 2013 and 2016 they made agreements with their regulator Ofgem to settle consumer protection investigations. Ofgem initially proposed substantial penalties but ultimately accepted a nominal penalty of £1. This was conditional upon the taxpayers making substantial payments to consumers charities and a campaign focused on energy consumers and having made or committing to make improvements to their compliance and customer service procedures. The investigations and settlements were made under Ofgem’s statutory powers.
HMRC denied the...
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CA rules that consumer redress payments were deductible for CT purposes.
In ScottishPower (SPCL) Ltd and others v HMRC [2025] EWCA Civ 3 (17 January) the CA decided that payments made by the taxpayers to consumers and consumer organisations pursuant to agreements made in settlement of regulatory investigations were deductible in calculating the taxpayers’ trading profits for corporation tax (CT) purposes.
The taxpayers are well-known energy suppliers. Between 2013 and 2016 they made agreements with their regulator Ofgem to settle consumer protection investigations. Ofgem initially proposed substantial penalties but ultimately accepted a nominal penalty of £1. This was conditional upon the taxpayers making substantial payments to consumers charities and a campaign focused on energy consumers and having made or committing to make improvements to their compliance and customer service procedures. The investigations and settlements were made under Ofgem’s statutory powers.
HMRC denied the...
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