In Scottish Power (SCPL) Ltd and others v HMRC [2023] UKUT 218 (TCC) (5 September 2023) the UT considered appeals by the taxpayer companies against a First-tier Tribunal (FTT) decision that all payments made under a number of settlement agreements entered into with their regulator (save for one payment which was made to customers directly affected by mis-selling) were non-deductible for corporation tax purposes.
The taxpayer companies being energy providers were subject to regulatory investigations by Ofgem which were settled by agreement. The investigations related to issues with mis-selling complaints handling and costs transparency. Under the resulting settlement agreements the taxpayer companies agreed to pay nominal penalty amounts of £1 and numerous substantive payments to consumers consumer groups and charities totaling circa £28m.
In addition HMRC brought a cross-appeal against the decision of the FTT that the payment to customers directly affected by...
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