Bloomberg News

Marks & Spencer Wins U.K. Court Ruling European Tax Relief

October 14, 2011

(Updates with HMRC statement in sixth paragraph)

Oct. 14 (Bloomberg) -- Marks & Spencer Plc can claim tax relief on some losses from its German and Belgian units, appeals court judges said in the company’s decade-long legal battle with British tax authorities.

The London court refused permission to appeal a June 2010 ruling allowing Marks & Spencer to reduce its tax bill based on losses incurred in 2000, 2001 and 2002, while refusing claims from 1998 and 1999. Under U.K. law, companies can use losses in a subsidiary to offset taxable profits in later years.

Marks & Spencer, the largest British clothing retailer, has been fighting U.K. authorities for nearly 10 years over whether it can claim tax relief on losses from its now-defunct subsidiaries in Germany and Belgium.

Simon Whitehead, a lawyer at Dorsey & Whitney who represents Marks & Spencer, said today’s ruling was “encouraging.”

London-based Marks & Spencer decided to close its stores in continental Europe in March 2001. Its German subsidiary had never made a profit since opening in 1996, peaking with a loss of 30.7 million pounds in the year ending March 2000, according to court documents.

HMRC, the British tax authority, said in an e-mailed statement that it would appeal to the Supreme Court.

--Editor: Anthony Aarons

To contact the reporter on this story: Kit Chellel in London

To contact the editor responsible for this story: Anthony Aarons at

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