HMRC v Root2tax

In HMRC v Root2tax [2017] UKFTT 696 (11 September 2017) the FTT granted an order confirming that arrangements were notifiable under DOTAS.

HMRC applied for an order that certain arrangements known as the Alchemy scheme were notifiable. The scheme involved ‘dressing up’ employee remuneration as betting winnings so as to avoid PAYE and NICs. Employees entered into a spread bet and a call spread option (CSO) knowing that their employer would relieve them of the CSO so that they would benefit whilst their employers would suffer a corresponding loss.

Root2tax marketed the scheme and the application was made against it because HMRC considered it as a promoter for DOTAS purposes. Root2tax contended that the arrangements were not notifiable because they did not give rise to a tax advantage (FA 2004 s 318); the user could not have undertaken the transactions in any other way. HMRC submitted...