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The Guardian - UK
The Guardian - UK
Business
Kalyeena Makortoff Banking correspondent

Ministers urged to close £2bn tax loophole in car finance scandal

A car windscreen with a sticker across it saying 'flexible finance available'
A compensation scheme is meant to pay redress to borrowers overcharged because of unfair commission arrangements. Photograph: Neil Hall/EPA

Ministers are being urged to close a loophole that will allow UK banks and specialist lenders to avoid paying £2bn in tax on their payouts to motor finance scandal victims.

Under the current law, any operation that is not a bank can deduct compensation payments from their profits before calculating their corporation tax, reducing their bill.

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