HMRC v Smartpay Ltd and another

In HMRC v Smartpay Ltd and another [2022] UKFTT 146 (TC) (3 May 2022) the First-tier Tribunal (FTT) granted HMRC’s application under the DOTAS provisions (FA 2004 s 314A) holding that the arrangements in question were ‘notifiable arrangements’ and that both of the companies which were the subject of the application were promoters of them. 

HMRC’s application involved two companies one UK-resident (UKCO) and the other resident in the Isle of Man (IOMCO). The arrangements were a ‘contractor loan scheme’ under which an individual user became an employee of one of the companies and UKCO entered into a contract with a UK intermediary to provide the individual’s services to an end user client. Via further steps the ultimate outcome would be that the individual would receive two payments from IOMCO a sum representing minimum wage and a loan. 

The FTT first considered whether the arrangements were notifiable....