HM Revenue and Customs
Printable version

HMRC wins disguised remuneration tax avoidance case

The Court of Appeal found in favour or HMRC that Mr Hoey was liable to pay the tax in his income in ‘Stephen Hoey and others v HMRC’ (13 May 2022).

HMRC welcomes the Court of Appeal decision, which confirms that this kind of tax avoidance scheme does not work.

Tax avoidance deprives the government of funds to pay for vital public services and is unfair to the majority of taxpayers who willingly pay their tax. HMRC will always take action to tackle tax avoidance, including challenging schemes in court.

Mr Hoey was an IT contractor. He used a disguised remuneration (DR) tax avoidance scheme, entering into an arrangement whereby he worked through an umbrella company based outside the UK to provide his services to UK-based financial service companies.

He received most of his earnings in the form of loans, organised by the umbrella company, which were initially claimed not to be taxable. HMRC is clear that these schemes do not work and the loans received are taxable as income.

Mr Hoey eventually accepted that he had received taxable income but he claimed he should not have to pay anything because he was entitled to a notional PAYE credit. There was no evidence that the UK-based companies that engaged him had any knowledge of the tax avoidance arrangements that he had entered into, nor of any requirement to operate PAYE.

The Court of Appeal’s finding that Mr Hoey was not entitled to a PAYE credit confirms HMRC’s position in collecting tax from taxpayers in cases where they enter into these types of convoluted arrangements to avoid it.

If you are involved in a tax avoidance scheme, or think you might be but are unsure, you should contact us as quickly as possible. We’ll help you get out of it and settle your tax affairs. The longer you leave it the bigger the tax bill.

Our job is to help get you back on the right track. If you can’t afford to pay everything in one go, we may be able to offer you an instalment arrangement.

You can settle under the Disguised remuneration settlement terms 2020.

These terms and the opportunity to spread payments over a number of years are still available for anyone wishing to settle their disguised remuneration liabilities. This includes people who received loans before 9 December 2010, where HMRC still has open enquiries or assessments.

Further information can be found in the HMRC issue briefing published on 11 April 2022.

Contacting HMRC and more information

You can email HMRC at

See GOV.UK for more information about disguised remuneration and settling your tax affairs.


Channel website:

Original article link:

Share this article

Latest News from
HM Revenue and Customs