It’s the law

Are parking fines an allowable deduction for corporation tax?

The taxpayer claimed parking fines incurred by its drivers when collecting or delivering cash in computing its profits for corporation tax. It said they were unavoidable and the trade could not be carried on without parking infringements taking place.

HMRC disallowed the claims (CTA 2009 s 54) saying the fines had been imposed for breach of the law even if they were incurred when exercising a trade. They were not deductible because the breach took them outside the character of a trading expense. They were imposed because of the company’s deliberate policy of parking in such a way that it incurred fines for which it was liable. As a result the payment of the fines was not a commercial loss connected with the trade but because of the breach of the parking laws.

The First-tier Tribunal...