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Hastings, an insurance company, has been indicted by a senior MP of making use of offshore structures in order to “line its own pockets” after a long-running tax action with HM Revenue and Customs (HMRC).
Dame Margaret Hodge, a Labour MP, hit out after a decision from the tribunal last January was determined in favour of Hastings Insurance Services Limited.
The said case revolved around whether Hastings should be able to obtain credit or recover, for purposes of VAT.
The case involved a company that is based in Gibraltar that is related to Hastings that is called the Advantage Insurance Company Limited.
Dame Margaret stated: “Hastings is another example of a big company using offshoring to line their own pockets.”
The Labour MP added: “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 spokesperson for Hastings said that the ruling was “the result of an exhaustive process where all the facts of the case have been fully presented and considered” and the judgments were “very clear” on the established facts and principles of law.
The spokesperson added: “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.”
A spokesperson for HMRC stated: “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.”