HMRC wins millions from bank avoidance case

HM Revenue and Customs (HMRC) has won a major tax avoidance case, protecting more than £17 million for UK taxpayers in the process. The Court of Appeal stopped an attempt by Fidex LTD - a subsidiary of BNP Paribas - to gain a tax advantage using artificial accounting arrangements.

The scheme tried to take advantage of different accounting standards covering the tax treatment of assets to create a tax benefit.

Jim Harra, Director General Business Tax, HM Revene and Customs said:

“This is another important win against tax avoidance. The scheme was being used by the subsidiary of a major bank to dodge tax and the Court of Appeal has confirmed that it doesn’t work.

"HMRC will always take on schemes like these on behalf of the vast majority of taxpayers who play by the rules and pay their share."

Notes to Editors

1. The Court of Appeal found in HMRC’s favour in the appeal submitted by Fidex Ltd against the earlier Upper Tribunal decision.

2. The Court of Appeal decision is available at http://www.bailii.org/ew/cases/EWCA/Civ/2016/385.html

3. The tax year affected dates back to 2004.

4. Specific legislation has now blocked the scheme.