News Article - 21 February 2007
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Retailer Marks & Spencer (M&S) has won an appeal in a case involving the offsetting of relief tax for foreign losses against UK profits.

The case refers to the period between 1998 and 2001, when the company experienced losses of nearly £100 million in countries such as Germany, Belgium and France. About £30 million was shaved off M&S' UK tax liability as a result.

In 2005, the European Court of Justice handed the matter to the UK and M&S appealed against the British court's interpretation of the ruling, which explained in what circumstances losses made abroad can be offset against domestic income in financial accounting.

The Court of Appeal said yesterday that firms can offset losses in Europe against UK profits when there is little chance of the losses being used domestically.

"Today's decision is good news for M&S and other taxpayers who have made similar claims for loss relief,'' Jonathan Bridges, head of international corporate tax at KPMG, told Bloomberg.

It is expected that other businesses will seek to capitalise on this ruling in the future, with some experts predicting that government income may be hit as a result, according to reports.

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