Kwik-Fit Group Ltd and others v HMRC

In Kwik-Fit Group Ltd and others v HMRC [2022] UKUT 314 (TCC) (25 November 2022) the UT upheld the decision of the FTT that certain intra-group loan relationships had an unallowable purpose dismissing both the companies’ appeal and HMRC’s cross appeal on the amount of interest to be disallowed. 

All of the appellant companies were members of the Kwik-Fit group. Following the acquisition of the group by a new owner a reorganisation of the group’s intra-group loans was carried out. A number of intra-group loans were assigned by the appellants to an intermediate holding company Speedy and three new intra-group loans were created. The interest rate on the assigned loans and one loan already owed to Speedy was substantially increased. The interest rate on intra-group loans that were not involved in the reorganisation was not increased. Speedy had a carried-forward...