Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.
Tuesday, 5 May 2015
HMRC vs UBS/Deutsche Bank
HMRC is going to the Supreme Court to appeal decisions made against it wrt two tax schemes operated by UBS and Deutsche Bank in 2003 and 2004, which were designed to avoid tax on bonus payments.
In the UBS and Deutsche cases, HMRC had claimed that the
sums allocated to employees as bonuses at the start of each scheme were
liable to income tax.
An earlier upper tribunal ruling had described both banks as
adopting a (as per the FT) “carefully planned tax avoidance scheme which was designed
to enable the [banks] to provide substantial bonuses to employees in the
tax year 2003/04 in a way that would escape liability to both income
tax and national insurance contributions”.
It is interesting that HMRC are going after schemes:
- that are over a decade old,
- no longer operate,
- were ruled legal by the court of appeal, and
- are based on restricted securities in that participants had to
agree to waive their bonuses in return for shares which were locked up
for a period of years. When the shares vested they were taxed on the
value in the form of CGT.
The case will go before the Supreme Court later this year.
Tax does have to be taxing.
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