November 5, 2026

Supreme Court rules £28m redress payments not tax deductible

In ScottishPower (SCPL) Ltd v HMRC the Supreme Court overturned the Court of Appeal and held that about £28 million of redress payments made to settle regulator investigations were not deductible for Corporation Tax. If your company has paid a regulator or settlement, we can help you check the tax treatment.

What this means for you

Limited companies

The court treated the payments as akin to penalties and not incurred for the purposes of the trade. If your company has made, or may make, payments to settle regulatory action, do not assume they are deductible and ask us first.

In Scotland

Corporation Tax is set UK-wide, so the ruling applies equally to Scottish companies. It is a UK Supreme Court decision and is not specific to Scottish tax law.

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