Movim • Ministers urged to close £2bn tax loophole in car finance scandal

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Ministers urged to close £2bn tax loophole in car finance scandal

news.movim.eu / TheGuardian • 6 December 2025

Banks and specialist lenders will not pay tax on compensation payouts, sidestepping 2015 rule

Ministers are being urged to close a loophole that will allow UK banks and specialist lenders to avoid paying £2bn in tax on their payouts to motor finance scandal victims.

Under the current law, any operation that is not a bank can deduct compensation payments from their profits before calculating their corporation tax, reducing their bill.

Th chevron_right

Ministers urged to close £2bn tax loophole in car finance scandal

news.movim.eu / TheGuardian • 6 December 2025

Banks and specialist lenders will not pay tax on compensation payouts, sidestepping 2015 rule

Ministers are being urged to close a loophole that will allow UK banks and specialist lenders to avoid paying £2bn in tax on their payouts to motor finance scandal victims.

Under the current law, any operation that is not a bank can deduct compensation payments from their profits before calculating their corporation tax, reducing their bill.

Th chevron_right

Ministers urged to close £2bn tax loophole in car finance scandal

news.movim.eu / TheGuardian • 6 December 2025

Banks and specialist lenders will not pay tax on compensation payouts, sidestepping 2015 rule

Ministers are being urged to close a loophole that will allow UK banks and specialist lenders to avoid paying £2bn in tax on their payouts to motor finance scandal victims.

Under the current law, any operation that is not a bank can deduct compensation payments from their profits before calculating their corporation tax, reducing their bill.