Spotlight on avoidance involving GDPR

HMRC’s Spotlight 65 General Data Protection Regulation (GDPR) provision used to reduce tax liability warns that some tax agents are offering advice to businesses on how to reduce their corporation tax liability by claiming a deduction for a GDPR provision in the company’s tax return or claim repayments of tax already paid or both.

HMRC say that the advice could involve emphasising risks around non-compliance with GDPR and the importance of setting aside provision for potential breaches of the rules with corresponding entries in the business’s accounts for such provision which would then be carried through into tax returns. HMRC also say that some agents may try to link the incorrect claims involving GDPR to the R&D claims process in order to falsely inflate the size of the R&D credit.