11 August 2021

Kwik-Fit & Others v HMRC; (FTT)

CORPORATION TAX – loan relationships – unallowable purpose test – intra-group reorganisation enabled acceleration of use of non-trading loan relationship deficit – Appellants agreed to increase rate of interest on loans – whether Appellants were party to loan relationships for an unallowable purpose – held yes – consideration of amount of debit attributable to that unallowable purpose on a just and reasonable basis – appeal allowed in part

Kwik-Fit Group Limited, Stapleton’s (Tyre Services) Limited, Kwik-Fit Finance Limited, Kwik-Fit (GB) Limited & Kwik-Fit Euro Limited v The Commissioners for Her Majesty’s Revenue and Customs.

This case is a useful development in the case on the unallowable purpose test.

Elizabeth Wilson QC and Ronan Magee were instructed by HMRC (Respondents).

You can read the judgment here.