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UK Taxpayers Face £2 Billion Loss from Finance Loophole

12/6/2025

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Summary

Story summary

UK ministers are urged to close a loophole that could cost taxpayers about £2 billion in corporation tax from motor finance payouts.
The loophole allows non-bank entities to deduct compensation payments from profits before calculating corporation tax, enabling Barclays and Lloyds to exploit the rule via their motor finance arms.
Liberal Democrat MP Bobby Dean plans to write to ministers to highlight the unfairness of taxpayers losing out.

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Story summary

UK ministers are urged to close a loophole that could cost taxpayers about £2 billion in corporation tax from motor finance payouts.
The loophole allows non-bank entities to deduct compensation payments from profits before calculating corporation tax, enabling Barclays and Lloyds to exploit the rule via their motor finance arms.
Liberal Democrat MP Bobby Dean plans to write to ministers to highlight the unfairness of taxpayers losing out.