Lloyds Irish losses leads to £1bn tax dispute

LLOYDS BANKING GROUP is locked in a £1bn tax dispute with HM Revenue & Customs over its use of Irish losses to drive down its UK bill.

The sizable assessment from the taxman stems from losses made in Ireland by the state-backed lender as it wound down its defunct Irish subsidiary.

It was notified in the second half of last year that HMRC was unhappy with the treatment of the Irish losses to offset the bank’s tax bill, the Telegraph reports.

Should HMRC win the case, Lloyds would have to pay £600m in tax and write off a further deferred £400m, which it currently has written off against future profits.

In a statement made to investors, Lloyds said: “The group does not agree with HMRC’s position and, having taken appropriate advice, does not consider that this is a case where additional tax will ultimately fall due.”