The Lords also raised issues over why there were so many problems with establishing the legal context for abuse of disguised remuneration schemes, which has resulted in the loan charge, which is charged to taxpayers who used the schemes to avoid income tax and national insurance contributions (NICs).

Jim Harra, chief executive of HMRC said: ‘HMRC was clear it had a legal case to challenge disguised remuneration schemes. There is a narrative pushed by campaigners that all users of schemes were unwittingly persuaded to use the schemes but there are many who advisedly entered into schemes and knew what they were doing. What we are trying to do is collect the tax we were due.’

Repeatedly questioned about the legal basis of HMRC’s position Harra told the Lords’ committee: ‘The Rangers case was a very wide ranging decision. We have had multiple pieces of advice about recovering tax from end users. We stand ready to defend legal cases on disguised remuneration.’  He added that there was ‘not a single overarching legal opinion’, which meant it took time for HMRC to agree its approach.

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