McLaren has successfully argued it’s case as to why it should be allowed to claim corporation tax back on its £32 million fine, imposed upon the team in 2007 for spying on Ferrari.
The issue went up in front of two judges who ruled the fine was ‘part of its trade in Formula One’ and should therefore be tax deductable.
Her Majesty’s Revenue and Customs (HMRC) argued the opposite, with their lawyer, Akash Nawbatt, stating: “The penalty arose from McLaren’s interference with Ferrari’s intellectual property: such interference was not part of McLaren’s trade or incidental thereto.
“The legitimate gathering of information was part of its trade but the illicit gathering of information was not. McLaren had said as much in its submissions to WMSC in the July hearing.”
However the tribunals two judges divided opinion and the decision of the presiding judge Hellier was accepted.
In a statement, he said: “This cost was not one imposed on McLaren, but one which it was contractually obliged to pay under contractual obligations undertaken for the purposes of its trade [under the Concorde Agreement]… the penalty was something which arose from its trade, was connected with its trade and was incurred wholly and exclusively for the purposes of its trade.”
The exact amount of tax in which McLaren can claim back isn’t certain yet, but could be around £6 million which would provide a significant boost to the teams profits which stood at £50 million in 2009, up from £5 million in 2008 and £35 million loss in 2007 as a result of the fine.
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