Janet Bray Ltd v HMRC

In Janet Bray Ltd v HMRC [2024] UKFTT 787 (TC) (29 August) the FTT upheld PAYE determinations and penalties issued on the basis that the company had been careless in implementing an employee loan scheme that it accepted did not work.  

The company provided consultancy services to the pharmaceutical industry and had only one director JB and no other employees. It entered an avoidance scheme intended to provide tax-free amounts to JB through the use of loans from an employee benefit trust (EBT) while also providing for an immediate corporation tax deduction for the company’s contributions to the EBT. The deduction would be justified on the basis that it was a payment to an independent company for a review of the business which would make recommendations as to how key employees such as directors should be rewarded and incentivised....