A £31 million offshore bonus tax avoidance scheme operated by Aberdeen Asset Management has been shut down by a Scottish court.
The FTSE 100-listed fund manager paid senior employees and directors bonuses free of income tax and national insurance contributions (NICs), between 2000 and 2003, using an employee benefits trust (EBT).
The Scottish Court of Session backed HM Revenue and Customs’ (HMRC) argument that PAYE (pay-as-you-earn) should be paid on the scheme, which was outlawed in 2003..
The PAYE and NICs at stake in the case total £7 million.
David Gauke, exchequer secretary to the Treasury, said: “The government has made £1 billion available to HMRC to tackle avoidance and evasion and to ensure that the minority that try to avoid their responsibilities pay the tax due.
“This scheme, like so many others, was a waste of time and money. The tribunal decision sends a clear message to anyone who is tempted to use avoidance schemes.”
Jim Harra, director general for business tax at HMRC, added: “We hope this success will encourage more organisations to cut their losses and come forward to settle their EBT liabilities, on the basis that this kind of avoidance scheme does not work.”