Treasury in payout threat
PUBLIC finances could take a further hit, it emerged last night, if multinationals succeed in securing several billion pounds in tax refunds from the Treasury.
The European Court of Justice is set to soon rule on whether Britain’s “stamp duty reserve tax” (SDRT) regime flouts European Union law.
The challenge under EU law of the tax treatment of transactions using clearance systems was brought by HSBC, the international bank, after Revenue & Customs refused to repay £27m of SDRT it incurred in 2000 during a takeover bid for CCF, a French bank. If the court rules in HSBC’s favour, it could trigger one of the largest pay-outs to multinationals from breaches of European anti-discrimination rules.
Tax experts calculate that businesses could claw back an estimated £2bn if the European Court finds against the Treasury.