HMRC Welcomes Three New Anti-Avoidance Victories

The UK’s Upper Tribunal has ruled in HM Revenue and Customs’s (HMRC’s) favor in three tax avoidance cases. The Department said that the judgments protected over GBP260m (USD385m) in tax.

All three rulings upheld earlier First-Tier Tribunal judgments in HMRC’s favor. In one case, the Upper Tribunal dismissed an appeal brought by users of a scheme that sought to create “artificial losses” by using a combination of the employment income and capital gains tax rules on share options. There were 420 users of this scheme.

The two other cases concerned bespoke avoidance schemes designed by banks to provide the users with a much higher tax-free return on their cash deposits than they could have obtained by placing funds in a normal deposit account. The court joined the two separate cases because of similarities between the schemes.

Financial Secretary to the Treasury David Gauke said: “The overwhelming majority of people pay the taxes they owe. These latest cases show that HMRC will effectively tackle those who try to get around their legal responsibilities. Users of tax avoidance schemes should think twice before trying to abuse tax reliefs to avoid paying their share of tax.”