The scheme is being promoted as a way to reduce tax on payments linked to GDPR fines or civil claims, which is used to incorrectly reduce corporation tax liability or claim repayments of tax already paid.

These claims are designed to reduce business profits through the recognition of a provision and a corresponding expense. This leads to businesses paying less corporation tax than they should, or claiming corporation tax repayments they are not entitled to.

Provisions and related expenses should only be recognised in accordance with relevant GAAP.