The High Court held that, although in principle such a decision would not constitute a forward tax agreement of the type held to be outside HRMC’s powers in the Al Fayed case, on these particular facts HMRC was right not to give the taxpayer that assurance.

The application for the Judicial Review of HMRC was made by Iain Clamp who had been the beneficiary of an employee benefit trust (EBT) arranged by his employer. Between June 2005 and August 2010 loans from this trust amounting to £1,885,000 had been made to him.

These loans had not been taxed as earnings because they were made before the introduction by the Finance Act 2011 of the ‘disguised remuneration’ provisions of Part 7a, ITEPA 2003, under which they would otherwise have been a taxable ‘relevant step’.

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