The successes include a Court of Appeal win concerning an avoidance scheme used by a number of large businesses. The lead case was Vocalspruce Limited, and there were 43 follower cases – a combined total of £85.4 million of tax was at stake. A number of other users of the scheme have already settled with HMRC, protecting a further £65.7 million.
The second case is an Upper Tribunal decision in HM Revenue and Customs’ (HMRC) favour in a case involving Fidex Ltd, a subsidiary of the global banking group BNP Paribas – a ruling which protects £17.2 million in tax.
In the third case, a First-tier Tribunal found for HMRC against an avoidance scheme used by one of the UK’s biggest waste management companies, Biffa Group. Biffa’s case, along with two other cases on use of the same scheme, involve around £15 million of tax. More than £16 million had already been settled by other users of the scheme ahead of the litigation.
Financial Secretary to the Treasury David Gauke said:
The message coming out of these cases is clear – entering into a tax avoidance scheme can be complex, expensive and cause extensive reputational damage for the companies involved.
Anyone who’s already using a scheme, or considering joining one, should think long and hard about the consequences of trying to avoid paying the tax that is due.
Jennie Granger, Director General Enforcement and Compliance, HMRC, said:
All three of these substantial and significant judgments further vindicate our strong stance against tax avoidance – we won’t hesitate to litigate if a satisfactory settlement can’t be reached through discussion.
In the case of the scheme used by Vocalspruce, our position has now been backed by two tribunals and the Court of Appeal, adding to our already strong record which sees us win 80% of cases we litigate.