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UK-based F1 teams in tax shock

NEWS STORY
20/11/2019

The seven UK-based F1 teams received more money from the taxman last year than they paid.

The teams receive money from HMRC after their tax bills were offset by losses, and between them the seven teams made a 60m net loss.

As a result, according to the Daily Mail, between them the seven UK-based teams received 13.6m last year, bringing the total for the last decade to 120m.

With teams allowed to carry over losses to future years to reduce their tax bills, Williams paid no corporation tax despite a pre-tax profit of 4.1m.

McLaren has 112m of UK tax losses to carry forward, while world champions Mercedes has 71m. Indeed, the 17.5m tax credit awarded to the Brackley-based outfit in 2014 was the biggest of the last decade.

As previously reported, the teams are also eligible for refunds of up to 12% of their research spending, which is likely to increase significantly next year as they prepare for 2021.

The news will not be seen favourably by taxpayers, especially those who are not fans of F1 and see the sport as elitist and awash with cash.

Indeed, it could be one of the reasons the sport is not looked on favourably in terms of royal honours such as knighthoods.

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1. Posted by DRAGON F1, 23/11/2019 1:49

"@kenji

Oh just Suck it up, and Get over it man, err woman!? Lol"

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2. Posted by Steve W, 21/11/2019 9:13

"'elitist and awash with cash'

So? What's wrong with that?"

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3. Posted by Spindoctor, 20/11/2019 16:20

"@kenji - where did that come from? Take a chill pill, please.

As to the tax rebates. These are based on BOOKEEPING losses - anyone who's ever worked in the city will know what THAT means! Bear in mind that Google which books well over 1B in UK sales pays virtually no UK tax, so these numbers aren't comparable to our domestic income\expenditure....

In order to 'lose' 71m Mercedes F1 is definitely afloat in cash - better than being awash, as those recently flooded will tell you! If I 'lost' anything like that, I think my Bank might intervene, but Sugar Daddy MB Daimler comes to the rescue.

The argument that Mercedes F1's employees all pay tax is a red-herring. As with Google's employees, if not working for Mercedes or Google, and assuming they weren't unemployed, they'd still be paying tax (unless they could afford Mercedes' Tax Lawyers) whoever they worked for. However much tax I pay is down to my work, not my employers.
Part of the rebate that Mercedes gains will go towards Lewis' salary and he's domiciled somewhere where tax is a dirty word.

Personally I don't really care. Mercedes F1 is a minnow in the tax-avoidance scheme of things, and there are many much fatter cats out there who could do with a haircut (did I mention Google?). As has been mentioned Mercedes F1 is at least a cutting-edge tech company, not a glorified Ad agency....."

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4. Posted by imejl99, 20/11/2019 12:44

"Yea, that is why..."

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5. Posted by kenji, 20/11/2019 12:17

"The continued jingoistic push by the UK media for Hamilton to be gifted a knighthood is quite sickening. It has been reliably put about over the years that the car, especially the Mercedes, forms the major input into a teams/drivers success. That being the case then why would any driver be given a knighthood? JS and RD were recognised for a far greater contribution than that of being an F1 river. As such Hamilton does not deserve an award of any description ATM. Fawning over his achievements has reached a new level of 'cringe'. Yes, he's good, exceptionally good, but so are a lot of other F1 drivers."

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6. Posted by Mambo, 20/11/2019 12:07

"'The news will not be seen favourably by taxpayers, especially those who are not fans of F1 and see the sport as elitist and awash with cash.'

Two points: if teams were really 'awash with cash' they wouldn't be making such large losses running businesses where being competitive and aiming to be the industry leader is vital for long term viability – which requires constant investment.

And what we're not told is how much tax is paid by team employees and suppliers (companies and employees) – far more than the offset losses."

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