Important motorsport sponsorship tax case

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Specialist motorsport accountants, Harris & Co, say that the recent tax case of Protec International Ltd [2011] TC 00867 shows how important it is to get the underlying commeriality of sponsorship deals right in order to endure that they sponsor gets a tax deduction. "This case, involving some well know competitors in the world of rallying, shows just how easy it is to fall foul of the rules," says motorsport accounting specialist Phil Harris. "The rules around motorsport sponsorship are the same for any expense," says Phil. "There has to be some business benefit or there can be no tax deduction. Clearly there were other factors at play here and there was no obvious business advantage to the motorsport sponsorship and so the Court decided that there could be no tax deduction."

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