M&S Verdict Good for Business, says IoD

13 December 2005

Today's decision by the European Court of Justice on Marks and Spencer's claim to UK group relief for overseas tax losses was welcomed by the Institute of Directors (IoD). It will allow UK group relief to continue with only minor changes. If the decision had been much less favourable to the British Government, group relief might not have survived.

Richard Baron, Head of Taxation at the IoD, said:

"Some groups may see their claims to relief for foreign losses fail. But this is still a good result for British business. It removes any justification for limiting the right of UK companies in the same group to get relief for each other's tax losses.

"The Government should now announce that group relief will continue to be available. They should do so quickly, so as to remove uncertainty. The minor changes that will be needed following the decision can be built on existing legislation for the losses of UK branches of foreign companies."