No absolute entitlement

A group of companies including Rangers Football Club created a remuneration trust for the benefit of employees and their families.

The businesses paid money into the trust directing the trustees to set up a sub-trust for each worker to whom a loan facility was made available.

The point in dispute was whether the payments into the trust and loan accounts should be taxed as emoluments under TA 1988 s 19(1) or as earnings in accordance with ITEPA 2003 s 62.

HMRC argued the payments were made by the employer for the benefit and enjoyment of employees and were therefore subject to PAYE tax and National Insurance. The department issued assessments against which the taxpayers appealed.

The First-tier Tribunal said   “Even in cases of ‘aggressive’ [sic] tax avoidance such as the present case the application of the Ramsay doctrine to strike...