In McLaren Racing Ltd v HMRC (TC02278 – 9 October) the FIA which is the governing body for Formula 1 motor racing imposed a penalty of £32m on a company (M) which had broken the rules of the FIA’s international sporting code by obtaining information belonging to a rival company (F). M claimed that this penalty should be allowed as a deduction in computing its profits. HMRC rejected the claim and M appealed. The First-tier Tribunal allowed the appeal (by Judge Hellier’s casting vote). Judge Hellier observed that the penalty was ‘one which (M) was contractually obliged to pay under contractual obligations undertaken for the purposes of its trade; it did not result from the action of an external regulator but from a body to whose dictates it had agreed to submit as part of its trade and in order to gain income; it arose...
