IPS Progression Limited (IPS), based in the Isle of Man, paid 1,593 scheme users largely with tax-free loans between April 2016 and April 2018. Some of the workers were locum doctors and nurses who worked on an agency basis for hospitals and other healthcare providers through recruitment agencies.

HMRC brought the legal action against IPS for failing to notify HMRC of its arrangement until April 2022 and at the First Tier Tribunal (FTT) Judge Christopher Staker decided the agency must now pay a penalty of £900,000, the second highest penalty ever issued by a tax tribunal.

The £900,000 figure decided by the tribunal was lower than the original penalty HMRC wanted, which was at or near the maximum amount of £1,333,200. There is a £600 a day penalty for non-compliance.