A tax charge of up to £30m could hit the Scotch whisky industry after distiller William Grant lost a test case appeal in a dispute over depreciation.
The dispute related to depreciation charged to stock, or whether companies should pay tax on profits before they have earned them.
Maurice Parry Wingfield, tax director at Deloitte & Touche, said: “HM Revenue & Customs believed it should be the gross amount. This would result in the full amount of the depreciation being taxed in the year, even though part of it doesn’t get charged to profit in the year.
“William Grant believed it should be the net amount, so the tax charge would reflect the true profit for the year.”
Companies that sell and replace stock quickly would not be affected, but Scotch must mature for a minimum of three years by law before it is sold.
The new ruling, if implemented, could result in an increased tax charge of £25-£30m over five to 10 years, said the Scotch Whisky Association.