HMRC Welcomes Bank Bonus Tax Scheme Ruling
HM Revenue and Customs (HMRC) has welcomed a court ruling against a major tax avoidance scheme used by banking giants UBS and Deutsche Bank, in which the agency successfully argued that the scheme had been designed to avoid around GBP135m (USD194.1m) in tax.
The scheme saw bankers given their bonuses in the form of shares in specially created companies, rather than cash, in the hope that the initial award of the shares and their subsequent redemption would be exempt from pay as you earn (PAYE) tax and National Insurance Contributions (NICs). HMRC challenged the arrangements on the basis that the shares were taxable as money’s worth and not exempt from PAYE or NICs.
The Supreme Court ruled in HMRC’s favour and HMRC has confirmed that it will now pursue a further GBP30m in tax from 27 other users of similar schemes.
The Financial Secretary to the Treasury, David Gauke, said: “This is an important victory and confirmation from the UK’s highest court that tax avoidance is simply unacceptable. The UK is home to some of the world’s most successful banks and we have been clear we expect them and their employees to pay their fair share of tax.”
Jennie Granger, Director General for Enforcement and Compliance, HMRC, said: “This is another important success for HMRC against an avoidance scheme with the top court in the country confirming our view this scheme did not work. This is the latest in a series of successful HMRC challenges to such schemes marketed at wealthy individuals to get out of paying tax. We will continue to challenge artificial arrangements such as these in the interests of the vast majority of businesses and people who choose to play by the rules.”
Source: Tax News
