In VolkerRail Plant Ltd and others v HMRC [2023] EWHC Civ 210 (1 March 2023) the Court of Appeal (CA) held that the taxpayers all UK resident group members were not entitled to group relief in respect of losses made by a UK branch of a Dutch group member and that the legislation restricting relief for such losses (as it was in force at the relevant time) was not incompatible with EU law.
The taxpayers were all UK resident companies which were members of an international group. In the years 2004 to 2008 the UK branch (VSCE UK) of a Dutch group member (VSCE) made substantial losses. Under Dutch law VSCE was part of a fiscal unity so that it was treated as a single taxpayer together with other Dutch group members. As a result VSCE’s losses were set off against the profits of the fiscal...
