R (on the application of Stephen White & Anor) v The Commissioners for HMRC [2025] EWHC 1600 (Admin)
27th June 2025
On 27 June 2025, Mr Justice Lavender delivered a permission to apply for judicial review judgment involving a group of 46 claimants challenging HMRC’s use of the s.684(7A) ITEPA discretionary power to deny PAYE credits in offshore contractor loan schemes designed and promoted by Edge Consulting Ltd and Aston Management Ltd.
Key Facts:
• The claimants worked for UK end users via UK intermediaries, with offshore companies (Edge and AML) acting as their employers. Their remuneration included a modest offshore salary and loans from Employee Benefit Trusts, which were initially considered non-taxable.
• HMRC viewed these schemes as disguised remuneration arrangements. In 2022, HMRC issued decisions exercising the 7A power, asserting it was inappropriate for end users to be liable for unpaid PAYE.
• The investigation involved scheme-level reviews and sampling of contractors, focusing on whether end users knew of/ participated in the schemes.
The Court upheld HMRC’s approach, confirming their investigation was sufficient and their exercise of discretion lawful. It emphasised HMRC’s broad discretion to decide when PAYE rules should and should not apply and found no evidence of improper purpose or impermissible retrospective exercise of the discretion.
Ximena Montes Manzano represented the group of Claimants.
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