A first-tier tax tribunal has ruled that security giant G4S cannot offset its parking fines against corporation tax, with a judge stating that G4S staff "consciously and deliberately" broke parking restrictions for commercial gain.
The tribunal (G4S Cash Solutions v HMRC TC05015 ), heard evidence that G4S incurred 10,000 penalty charge notices (PCNs) a year from 2008 to 2010.
G4S argued that PCNs incurred while delivering consignments of cash to clients were a business expense, and therefore could be used to reduce profits for tax purposes. Through this scheme the company’s cash solutions arm aimed to reduce its corporation tax bill by £580,000.
G4S also claimed that it tried to keep staff safe by parking as close to the premises as possible.
However, judge Anne Scott rejected this claim, upholding the revenue’s long standing assertion that fines for breaking the law cannot be used to reduce a tax bill.
Commenting on the ruling HMRC’s director general of business tax, Jim Harra, said: “We’ve always said fines incurred for breaking the law are not tax deductible. The tribunal has now established a clear precedent for rejecting any future such claims.”
Responding to the verdict a G4S spokesperson said the company were “disappointed” by the decision, adding that they were “considering our position” with regards.
“Transporting cash is inherently dangerous and our cash teams are regularly subject to criminal attacks”, the spokesperson continued.
“By parking closer to pick-up destinations, we better protect our staff, customers and the public, but in so doing we regularly incur parking infringements.”