G4S used parking fines in bid to avoid £580,000 in tax: Judge accuses firm after it tried to claim penalties were a legitimate business expense
- G4S blocked from trying to use huge parking fines to cut its tax bill
- The company tried to avoid £580,000 in corporation tax from 2007 to 2010
- It claimed parking fines – incurred when delivering large amounts of cash – were a legitimate business expense, as it tried to keep staff safe
- But judge has blocked firm from claiming the fines as a business expense
Security giant G4S has been reprimanded by a judge after running up huge parking fines and trying to use them to cut its tax bill.
The company – criticised for botching its 2012 London Olympics contract – tried to avoid £580,000 in corporation tax from December 2007 to December 2010.
It claimed parking fines – incurred when delivering large amounts of cash – were a legitimate business expense, as it tried to keep staff safe by parking as near to the premises as possible, sometimes on pavements.
But a judge blocked the firm from claiming the fines as a business expense after a tax tribunal ruled in HMRC’s favour.
Judge Anne Scott rules that G4S staff ‘consciously and deliberately decided to break parking restrictions for commercial gain.’
G4S had argued that the fines were a legitimate business expense as it tried to keep its staff and customers safe by parking as near to the premises as possible.
It pointed out there are around 1000 attacks every year on security staff carrying cash and valuables.
Around three quarters of these occur on the pavement when the van is leaving or arriving at its destination.
The criminals - often carrying weapons including guns - use a wide range of techniques including ram raids, vehicle hijackings, snatch attacks and kidnapping.
Judge Anne Scott acknowledged this often happens in public places and can put the general public and customers’ employees at risk.
But she backed HMRC, which has insisted that fines for breaking the law cannot be used to reduce a tax bill.
Jim Harra, director general of business tax at HMRC said: ‘We’ve always said fines incurred for breaking the law are not tax deductible.
The tribunal has now established a clear precedent for rejecting any future such claims.’
A G4S spokesman said: ‘Transporting cash is inherently dangerous and our cash teams are regularly subject to criminal attacks.
‘By parking closer to pickup destinations, we better protect our staff, customers and the public, but in so doing we regularly incur parking infringements. We find it outrageous that HMRC would suggest we are seeking commercial gain by protecting our colleagues from the hundreds of criminal attacks they suffer every year.’
G4S came under fire almost four years ago when it could not provide enough guards for the London Olympics.
The government was forced to deploy an extra 1,200 troops to provide security for the event.