KPMG loses to HMRC in McLaren spy fine battle

Spies? Check. Race cars? Check. Millions of dollars? Check. HM Revenue & Customs’ (HMRC) appeal against McLaren yesterday had more in common with a James Bond novel than an Upper Tier tax tribunal.

This was an appeal with va va voom and almost certainly the first time a tax collector has beaten McLaren to the finish.

The Upper Tribunal ruled that the Formula One team could not claim back tax on a £32m fine imposed in 2007 for spying on rivals Ferrari.

The racing industry is certainly no stranger to litigation but cheating as an everyday hazard? The First-tier Tribunal thought so, but not the appeal judges.

KPMG walked away without a trophy, having instructed Temple Tax Chambers’ Alun James for the appeal for McLaren. HMRC’s in-house legal team sped to the finish, having instructed Devereux Chambers’ Akash Nawbatt and Christopher Stone.

The background to this racing scandal makes for hot summer reading. CMS Cameron McKenna, Lewis Silkin and Baker & McKenzie all snared roles on “Spygate”. Who needs James Bond when you’ve got tax law?

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