In Opus Bestpay Limited v HMRC [2020] TC5530, a company claiming to be a ‘back-office’ for a Contractor Loan tax scheme was found to be a scheme promoter.

  • Under this widely used and promoted contractor loan scheme, freelance contractors tried to avoid Income Tax and national insurance by routing their income via offshore entities which paid them small monthly retainers and the balance of their income as ‘loans’.
  • The loans would never actually be repaid and HMRC concluded that this was a Disguised remuneration loan scheme and fell to be a notifiable arrangement under the Disclosure of Tax Avoidance schemes (DOTAS) rules and as OBL was one Promoter of the scheme.
  • OBL denied that this scheme was notifiable and claimed there was no tax advantage. It claimed that it had little involvement with the companies who ran the scheme and it was simply a back-office who passed on scheme details to new participants.

The FTT found that OBL’s witnesses lacked credibility and that OBL had created marketing and compliance documents for the loan scheme and different people were using ‘bestpay’ email addresses which made it clear that there was involvement with the different parties in the promotion and running of the scheme.

The FTT concluded that OBL was promoting a standardised tax product that should have been notified under DOTAS.


Disguised Remuneration Zone
All about disguised remuneration and contractors loans and the loan charge.

Disclosure of Tax Avoidance schemes (DOTAS)
What are rules on Disclosure of tax avoidance schemes (DOTAS)? When should you disclose your use of a tax avoidance scheme? What are the consequences of non-disclosure? How are penalties calculated?

Promoters of tax avoidance schemes
Who is a Promoter? What are the Promoters of Tax Avoidance Scheme rules?  What does this mean for promoters, intermediaries and clients?

DOTAS: Are you an introducer?
Who is an introducer for the purposes of the Disclosure of Tax Avoidance Schemes (DOTAS) regime and why does it matter? 

DOTAS: What to do if you are given a scheme reference number
A scheme reference number (SRN) allows HMRC to identify users of disclosed tax avoidance schemes

External link

Opus Bestpay Limited v HMRC [2020] TC5530