Marlborough DP (MDPL) is a dental practice owned by sole director Dr Matthew Thomas, who paid himself primarily through trusts registered in Belize. He then took money out of the trust in loans. This was so MDPL could pay less in corporation tax and for Thomas to reduce his liability for income tax.

The Upper Tribunal confirmed at the outset of the case that ‘it is now accepted, and it is common ground, that the tax avoidance scheme was not effective’. MDPL used a marketed tax avoidance scheme promoted by entities connected with Paul Baxendale-Walker. The issue at the heart of this case was the correct tax treatment for income tax and corporation tax.

Between 2008 and 2014 MDPL transferred over £500,000 to a private trust in Belize, with some payments totalling £125,000. Thomas would then request the same amount of money in loans.