Spying in F1 a tax deductible activity, justifies McLaren

© Ubaid Parkar, 17 October 2012
AP Photo/Geert Vanden Wijngaert

McLaren has effectively reasoned that the fine imposed by the FIA during the espionage controversy that rocked Formula 1 in 2007 is tax deductible as it was a part of its normal operations.

The British team was fined $100 million by motorsport’s governing body after it was found guilty of possessing a dossier of data belonging to Ferrari in the hands of Mike Coughlan, who was McLaren’s chief designer at the time.

However, the final fine imposed was $51.33 million, accounting for the financial loss incurred as the team was docked all its points in the constructors' championship for the offence.

The British government had argued that that the 'illicit gathering' of data cannot be justified as a legitimate trading activity but McLaren contended otherwise claiming it was 'connected', calling for an exempt from corporation tax.

"McLaren Group is a successful UK company, which provides high-quality employment and substantial tax revenue," a McLaren spokesman was quoted saying by Reuters.

"In 2007, McLaren Racing Ltd was required to pay a penalty, following a breach of the International Sporting Code of the FIA. After consideration, a Government tribunal has found that such a contractual penalty is tax-deductible,” confirmed the spokesman.


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Related: 2012, McLaren