Formula One's new owner has slashed its tax bill following a decision by HMRC, despite the introduction of new rules that forced it to abandon a legal avoidance scheme involving massive loans from offshore havens.

The government has cracked down on schemes of the type once used by F1 to secure an effective corporate tax rate of around 2pc. However, the impact on the motor racing series will not be as great as previously feared.

In a letter to its investors, the controlling shareholder Liberty Media said F1 is “now expecting a mid to high single-digit effective cash tax rate on UK earnings before interest, tax, depreciation and amortisation (Ebitda)”.

The forecast represents a saving of millions of pounds compared with Liberty’s earlier prediction that it would have to pay a “low double digit” rate on Ebitda, which was $450m (£350m) in 2016. Then F1’s corporation tax bill only came to $8.5m (£6.9m) as a result of it paying interest on massive intercompany loans from entities in tax havens.