Chancellor on tax deductibility of fines
7 April 2016
Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee, has written to the Chancellor seeking further clarification on whether banks can offset any of the payments they make to regulators, against their corporation tax bill.
- Letter from Rt Hon Andrew Tyrie MP to Rt Hon George Osborne MP, 5 February 2016
- Letter from Rt Hon George Osborne MP to Rt Hon Andrew Tyrie MP, 15 February 2016
- Letter from Rt Hon Andrew Tyrie MP to Rt Hon George Osborne MP, 6 April 2016
- Treasury Committee
Chairs comments
Commenting on the correspondence, Mr Tyrie said:
"Taxpayers appear still to be on the hook for the costs of the banks' misconduct.
A restriction on the tax deductibility of compensation payments to customers has been reinforced by the Finance Act 2015. This is a big step forward. But the Chancellor's reply suggested that compensation payments to regulators could still be tax deductible. This would be unacceptable.
Compensatory' payments have in the past been held to be tax deductible. This should change. If tax law can't be changed beyond the changes made last year, then UK regulators should ensure that any payments required from banks for misconduct are either compensation payments to customers, falling within the scope of last year's changes, or are clearly set out as fines and not as ‘compensatory' payments."
Further information
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