HM Revenue & Customs is unlikely to be happy with the judgment delivered by Mr Justice Henderson in what has been dubbed the class action Thin Cap GLO case. The case concerned five multinationals that had lent money to their UK subsidiaries, which HMRC deemed to be excessive. In his judgment today, one of the longest in a tax case in the High Court, he held that UK law should not apply where lending was for overriding commercial reasons, and that it should be for HMRC to demonstrate that the lending was not commercial. In this case he held that Lafarge, Volvo and Siemens succeeded in principle in their claims. The European Court of Justice had previously decided that the UK's law prior to the Finance Act 2004, which restricted interest deduction where these exceeded arms-length amounts, went further than needed to protect the UK tax base. As a result, the case was remitted to the UK for the national court to consider the UK provisions in detail. Bill Dodwell, head of tax policy at Deloitte, said: 'HMRC will not be happy with this result. The judge has held that there were commercial reasons for lending in all cases, even though several companies had previously agreed to disallow part of their interest claims. Inevitably the case will go to the Court of Appeal and possibly the Supreme Court.'