Labour is calling for a review of Formula One's tax affairs after the company revealed it banked a settlement with HMRC worth £180 million last year and paid just 2% on its UK profits.

The Shadow Chancellor, John McDonnell, told ITV News: "Many people will think it's a sweetheart deal and I can understand why.

"I enjoy watching Formula One but we have to ensure there's a fair taxation system and all businesses and all operations in this country should pay their way.

"In Labour's manifesto at the last election we highlighted the schemes that Formula One entreated into with Her Majesty's Revenue and Customers. I find this settlement shocking and it needs to be reviewed now."

Liberty Media owns Formula One. Liberty's annual report and accounts were published last month and they reveal that Formula One agreed a "settlement with the (UK) tax authorities" worth $253 million - around £180 million.

The taxman's generosity didn't end there. The official rate of corporation tax is 19% but, as Chris Sylt explains, Formula 1 only paid 2% on its profits in 2017 and, remarkably, expects to pay less a rate of less than 10% in the years to come.

Formula One stages races all over the world but the company which owns the commercial rights for the sport is headquartered in London.

Why did HMRC let Formula 1 off such a large tax bill? We don’t know. In a statement HMRC said “we do not comment on individual taxpayers.”

Formula 1 also prefers to keep the details of the settlement private. In a statement it told ITV News “Formula 1 conduct all of its tax matters fully in accordance with applicable tax law.”

The government has repeatedly changed the law to tackle corporate tax avoidance.

But Richard Murphy, professor of political economy at City University, believes the lack of transparency regarding HMRC’s agreement with Formula 1 shows there’s still a big problem.

“Undoubtedly this is tax avoidance. Tax avoidance can be legal. What’s wrong with this (settlement)? It’s wrong because we don’t know whether it’s right or not. And that’s the fundamental point.

"We don’t know whether HMRC have argued the right case because its not been made public. We don’t know whether they’ve got the resources to manage this and we don’t know what evidence the company has presented to prove that its case is sound.”