Tax ruling on CIT parking fines

The security contractor G4S cannot set its parking fines against its tax bill, the tax tribunal has ruled. G4S Cash Solutions, the cash in transit (CIT) and logistics arm of the firm, aimed to reduce their corporation tax bill by around £580,000 but the first-tier tribunal has ruled in favour of HM Revenue & Customs (HMRC) in rejecting the bid.

G4S incurred parking fines usually while delivering consignments of cash over the pavement. The firm claimed that these were a business expense and so could be used to reduce its profits for tax purposes. The tribunal ruled G4S staff consciously and deliberately decided to break parking restrictions for commercial gain.

The ruling upholds HMRC’s long standing view that fines for breaking the law cannot be used to reduce a tax bill.

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.”

It’s long been a bugbear of the CIT sector in general that – in an effort to park as close to a bank or business premises as possible, to reduce the risk of robbery during the riskiest part of the job, when carrying cash between a building and the secure vehicle – vans get parking tickets.

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