Key Facts
- •Greenwich Contracts Limited (Greenwich) appealed against HMRC's decision to allocate a scheme reference number (SRN) under the Disclosure of Tax Avoidance Schemes (DOTAS) regime.
- •The arrangements involved payments to contractors via Greenwich and Integra Resourcing Limited (Integra), a Malta-registered company.
- •Greenwich paid contractors the National Minimum Wage (NMW) with deductions, while Integra made additional payments without deductions.
- •HMRC suspected the arrangements were designed to reduce tax liabilities.
- •Greenwich argued they were not involved in tax avoidance and acted as a standard umbrella company.
- •The dispute centered on whether HMRC had reasonable grounds to suspect the arrangements were notifiable and whether Greenwich was a promoter.
Legal Principles
DOTAS regime requires HMRC to provide early information about tax arrangements, including identifying promoters.
R (on the application of Walapu) v Revenue and Customs Commissioners [2016] EWHC 658 (Admin)
A notice of potential allocation of a scheme reference number under section 310D must be issued to a person HMRC reasonably suspects to be a promoter.
Finance Act 2004
The burden of proof in appeals under section 311B rests with the appellant.
This case
Arrangements are 'notifiable' if they meet criteria specified in the Finance Act 2004 and the Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2006.
Finance Act 2004 and Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2006
The definition of 'promoter' under section 307 includes responsibility for the design, organisation, or management of notifiable arrangements.
Finance Act 2004
Outcomes
Appeal dismissed; HMRC's decision to allocate the SRN was affirmed.
The Tribunal found that HMRC had reasonable grounds to suspect the arrangements were notifiable and that Greenwich was a promoter. Greenwich failed to discharge the burden of proof.