Those named in the high-profile avoidance case included former Radio 1 DJ Chris Moyles, who had been working at the BBC when he participated in the scheme.

The FTT decided at the hearing of Eoghan Flanagan, Christopher David Moyles, Allan Stennett v HMRC [2014] TC03314 that the ‘Working Wheels’ scheme, promoted by NT Advisors to 450 fund managers, celebrities and other high earners between 2006 and 2008, was highly artificial. The scheme involved its users claiming to be self-employed used car traders and making large tax deductions on finance fees incurred to borrow money to invest in their ‘trade’.

The FTT noted  that the ‘purpose of the scheme was to manufacture a tax loss much greater than any true economic loss at little or no financial risk to the user, whose exposure was limited to the cost of the promoters’ fees and some other minor expenses’. It said that a realistic view of the facts showed that the appellants’ aim was to make it appear, ‘as though by  magic’, that they had incurred vast fees in order to borrow modest amounts of money they did not need in order to invest it in a ‘trade’ they had no desire to pursue. The appellants loss claims were accordingly disallowed.

This is the fourth consecutive win by HMRC against schemes promoted by NT Advisors and will save the country £290 million. The 450 other users of the scheme will be contacted directly and asked to pay the tax they owe, or face accelerated litigation.

Treasury secretary David Gauke said: ‘This case is another example of why taxpayers should not fall for the promises of promoters selling schemes that are all too often too good to be true. Not only will the taxpayer waste money on the fees for these failed schemes, they will still have to pay all the tax, interest and penalties that are due.’

The FTT ruling is available at http://www.financeandtaxtribunals.gov.uk/judgmentfiles/j7618/TC03314.pdf