Comparing two employee benefit trust cases

Key points

• Liquidators are pursuing directors of insolvent companies to pay HMRC.
• In Vining Sparks the court found the director had acted in good faith.
• The judge in Implement Consulting found the employee benefit trusts payments to be distributions.
• Further appeals may be a possibility.

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HMRC has been busy of late lodging proof of debts in the liquidation of companies that cannot pay their PAYE and National Insurance liabilities in relation to employee benefit trusts (EBTs). These are companies affected by the Supreme Court decision in RFC 2012 plc [2017] STC 1556 that monies paid into such schemes were subject to tax. In response the liquidators are vigorously pursuing the directors of these companies for monies paid into such trusts going back to 2002 to satisfy HMRC’s proofs of debt.

 

Two recent decisions of the Insolvency and Companies Court have reached contradictory conclusions on this...

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