Introduction

Long before the disguised remuneration (DR) legislation, HMRC had challenged employee benefit trusts (EBTs). Macdonald (HMIT) V Dextra and Sempra Metals Ltd v Revenue and Customs Comrs, heard the decade before disguised remuneration, were largely considered by the profession to have set a clear precedent on the tax treatment for contributions to and benefits received from EBTs.

The tax purpose of the DR legislation was to create a tax charge upon certain events 鈥� 鈥榚armarking鈥� thereby rendering the use of third party arrangements to 鈥榬emunerate鈥� employees obsolete without tax advantages. However, the DR legislation, when considered against the disclosure of tax avoidance schemes legislation, the promoters of tax avoidance scheme legislation and the general anti-abuse rule, is intended to change the perception of tax avoidance.

On 26 November 2020, HMRC published a report 鈥楿se of marketed tax avoidance schemes in the UK (2020 to 2021)鈥�. The report states 鈥渃irca 99% of the avoidance market was disguised remuneration schemes鈥�. HMRC published the names of 18 promoters and 20 schemes between