Arrangements are notifiable under DOTAS regime

Two companies - Smartpay Ltd a UK-resident company (UKCO) and Smartpay Consulting Ltd an Isle of Man resident company (IOMCO) - offered a ‘contractor loan scheme’ under which an individual user became an employee of one of the companies and UKCO entered into a contract with a UK intermediary to provide the individual’s services to an end user client. Ultimately the individual would receive two payments from IOMCO a sum representing minimum wage and a loan.

HMRC considered the arrangement was notifiable under the disclosure of tax avoidance schemes (DOTAS) regime (FA 2004 s 306) and sought an order under s 314A from the First-tier Tribunal.

The tribunal considered whether the arrangements within one of the DOTAS hallmarks. On the premium fee hallmark UKCO said it had not received a premium fee and nor would it have been able to do so for the...