Insurance company Hastings defends its position following tax row

Insurance company Hastings has been accused by a senior MP of using offshore structures to "line its own pockets" following a long-running tax battle with HM Revenue and Customs (HMRC).

Labour MP Dame Margaret Hodge hit out following a tribunal decision in January determined in favour of Hastings Insurance Services Limited.

The case revolved around whether, for VAT purposes, Hastings should be able to recover or obtain credit.

The case involved a Gibraltar-based company related to Hastings called Advantage Insurance Company Limited.

Dame Margaret said: "Hastings is another example of a big company using offshoring to line their own pockets."

She continued: "It is simply unacceptable for Hastings who are providing services to UK customers to gain a tax advantage in this way.

"It creates an unfair playing field over UK companies who are playing by the rules and this decision can only encourage other companies to follow suit.

"I urge HMRC to appeal this decision and I will be writing to the Treasury Select Committee urging them to look into Hastings' behaviour."

A Hastings spokeswoman said the ruling was "the result of an exhaustive process where all the facts of the case have been fully presented and considered" and the findings were "very clear" on the principles of law and established facts.

The spokeswoman continued: "Hastings notes that the ruling recognises the substantial business operations the group has in the British overseas territory of Gibraltar, which were established in 2002.

"The political and commercial relationships between the UK and Gibraltar are of long-standing significance and importance.

"It is also important context that Hastings is a significant contributor to the UK economy, having borne or collected over £320 million in UK taxes in the past three financial years and created around 1,500 new jobs in that time.

"The group's published tax strategy is very clear and transparent about the way in which the group conducts its business."

An HMRC spokesman said: "We are considering the judgment and whether to appeal.

"HMRC has a strong track record of tackling tax avoidance, evasion and non-compliance.

"The UK's tax gap is down to 6% - its lowest level ever, and one of the lowest in the world."

Read Full Story

FROM OUR PARTNERS