Finance firm Bristol & West has lost a £27m tax avoidance case after trying to exploit a non-existent loophole.
HM Revenue and Customs (HMRC) challenged the attempt to avoid Corporation Tax by the former building society, now owned by The Bank of Ireland, and the Court of Appeal has ruled HMRC was right. 
Another £5.9m is at stake in a follower case while another five users of the scheme conceded before the legal action began, paying £215m in tax.
The avoidance scheme sought to exploit the move from one piece of legislation to another. Contracts were moved from Bristol & West under the old legislation but were received under the new legislation by Bank of Ireland Business Finance.
Bristol & West admitted the transfer of the contracts was done solely to avoid tax but they argued the scheme worked because the move from one piece of legislation to the other created a loophole.
HMRC’s director general of business tax Jim Harra said: “This was a cynical attempt to exploit a non-existent loophole to avoid paying tax. 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.”
