A client of mine is being sued by CMA (Competition authrrities).
He may need to pay a penalty of 500 K. Would this expense be deductible for tax? Which section of the tax law applys (ITTOIA)?
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Without knowing the reason for the penalty its difficult to say but have you looked at
http://taxandchancery_ut.decisions.tribunals.gov.uk/Documents/decisions/...
McKnight v Sheppard [1999] STC 669 and BIM42515.
I would have thought the reason for a penalty was to punish for wrong doing. If you give tax relief then it defeats the objective of a penalty if they get tax relief.