U.K. Minister Invested in Contested Tax Allowances Project: FT
(Bloomberg) -- Justice Minister Lord David Wolfson invested in a project that has become the subject of a dispute with U.K. tax authorities, the Financial Times reported, citing his register of interests in the House of Lords.
The project involved the construction of two data centers in the northeast of England and generated 131 million pounds ($176 million) in tax allowances for investors, the FT reported. The Cobalt data center project is now in a legal dispute with Her Majesty’s Revenue and Customs, which has sought to block the allowances, it said.
The project was structured so that investors paid 30% of the construction cost but were able to claim 100% of the tax allowances for investing into an economically deprived area. The data centers are currently empty.
A tax tribunal ruled the arrangement lawful in 2019 but cut the tax allowances by half. The Court of Appeal is set to hear the case next year, the FT said, citing HMRC.
“Lord Wolfson invested in good faith in a government-backed regeneration program,” a spokesman for Wolfson said in a statement. “The initial High Court decision means that Lord Wolfson has in fact paid more tax than was actually due.”
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