M & S – the fat lady hasn’t sung yet

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M & S has won the latest round of its claim to offset losses made overseas against taxable profits arising in the UK. The Court of Appeal has ruled largely in its favour and the following pack of 300 odd companies are celebrating.

There are two reasons why I wonder about the cause of joy. The first is simple. This case is bound to move on to the Lords, and there's absolutely no guarantee they will agree. In fact, I'd almost go as far as saying this current victory increases the chance of their Lordships ruling against M & S, such is the nature of the UK court system.

Second, this victory is indicative of the short term view of so many in UK business management. If the Lords confirm the decision then some of these companies will get a cash flow boost. But there will be long-term legislative consequence. It may be that the scope of group relief will be limited in the UK. It could be that another measure, such as tax relief on interest will be changed to recover losses. But you can be sure that if this ruling restricts the breadth of the tax base in one area it will be widened in another.

Petty argument on detail is not the way for UK business to seek to progress its cause for better tax. Cooperation in an atmosphere of openness and transparency is. Then relationships of trust will be built. The litigation culture behind cases like M & S, many of which emanated out of one aggressive firm of lawyers, have done a lot of harm to that cause - much more than anything done by HMRC.