Bank of Ireland loses £27m tax court battle
Bank of Ireland has been accused of a "cynical attempt" to exploit a legal loophole after it lost a £27m tax avoidance case in the UK. The case dates back to 2003 and involves a UK subsidiary of the bank - the former building society Bristol & West (B&W).
HM Revenue & Customs (HMRC) said the avoidance scheme focused on corporation tax and sought to exploit the move from one piece of legislation to another.
It saw contracts moved out of B&W, under old legislation, and then received by another subsidiary, Bank of Ireland Business Finance Limited, under new legislation in August 2003.
The UK tax authority sought to challenge the attempt to avoid tax, and the issue was appealed to the Court of Appeal, which ruled in favour of HMRC.
Jim Harra, HMRC's director general of business tax, said they would continue to pursue those who try to avoid paying tax bills.
"This was a cynical attempt to exploit a non-existent loophole to avoid paying tax," he added.
"It has failed. We will continue to investigate and pursue those who try to avoid paying their fair share on behalf of the majority who play by the rules and pay the tax they owe."
In a statement, Bank of Ireland said it considered the decision "conclusive and definitive". It also said that it noted the fact that as it is an issue that dates back 12 years, the tax assessed has already been paid.
"The group will not be pursuing a further appeal and is satisfied that the acknowledged legislative and procedural uncertainties have now been clarified," a spokesman added.
"The group has signed up to the Code of Practice on Taxation of Banks and is fully compliant with its obligations under the code."