According to press reports, a senior European Court adviser has told Marks & Spencer that it is entitled to claim tax relief from the UK Treasury on losses incurred in other countries in the European Union.
Subject to approval by the European Court, this decision has far-reaching repercussions. It is a blow to Labour Chancellor Gordon Brown and his team and could cost the UK Treasury billions of pounds in taxes.
Advocate general Poiares Maduro advised M&S that it should be allowed to offset losses at foreign subsidiaries against parent company profit and that it has been wrongly discriminated against by the UK government.
Any ruling by the European Court is not expected until later in the year, but the Advocate General's opinion is usually a deciding factor. If it wins the case, M&S has already predicted it will gain £30m.
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