Commissioners for Her Majesty's Revenue and Customs v Marks and Spencer plc

Commissioners for Her Majesty's Revenue and Customs v Marks and Spencer plc

Successive claims for cross-border group relief are permissible within statutory time limits, provided earlier claims are withdrawn if later claims satisfy the 'no possibilities' test. The correct method for calculating losses is to convert unutilised local losses to UK principles (Method E). The principle of effectiveness does not require extension of time limits for pay and file claims where no right existed at the time of claim.

Parties
Appellant/respondent: Commissioners for Her Majesty's Revenue and Customs; Appellant/respondent: Marks and Spencer plc
Jurisdiction
England and Wales
Judgment Date
19 February 2014
Procedural Posture
Tax Appeal / Supreme Court Judgment on Appeal From Court of Appeal
Outcome
Appeals of HMRC on issues 2 and 5 dismissed; appeal of M&S on issue 4 dismissed.
Legal Topics
Group Relief, Cross Border Loss Relief, Corporation Tax, Freedom of Establishment, Time Limits for Claims
Tax Law European Union Law Corporate Law Group Relief Cross Border Loss Relief Corporation Tax Freedom of Establishment Time Limits for Claims

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Parties

Commissioners for Her Majesty's Revenue and Customs

Appellant/respondent

Marks and Spencer plc

Appellant/respondent

Procedural Posture

Tax Appeal / Supreme Court Judgment on Appeal From Court of Appeal

Legal Issues

  1. 1 Whether sequential/cumulative claims for cross-border group relief can be made for the same losses within statutory time limits
  2. 2 Whether the principle of effectiveness requires allowance of fresh or sequential claims after ECJ clarification
  3. 3 What is the correct method for calculating losses available for cross-border group relief

Ratio Decidendi

Successive claims for cross-border group relief are permissible within statutory time limits, provided earlier claims are withdrawn if later claims satisfy the 'no possibilities' test. The correct method for calculating losses is to convert unutilised local losses to UK principles (Method E). The principle of effectiveness does not require extension of time limits for pay and file claims where no right existed at the time of claim.

Court Disposition

Appeals of HMRC on issues 2 and 5 dismissed; appeal of M&S on issue 4 dismissed.

Orders

  • M&S is entitled to advance all its self-assessment claims for group relief within statutory time limits.
  • Relevant pay and file claims are time-barred and cannot be pursued.