UT/2021/000192 - [2024] UKUT 00242 (TCC)

It was a misdirection of law to say HMRC had not confirmed the liabilities were due given the Regulation 80 determination it had made. The quantum of liability was in any case irrelevant to whether the 7A discretion should be exercised (except to the extent there were concerns about collection but that was not identified by HMRC as an issue here).

It was a misdirection of law and/or irrelevant consideration for HMRC to rely on UBS’s potential liability to Class 1 Primary or Secondary NICs to decline to exercise the 7A discretion given the NICs liability would ultimately be determined by the amount on which Mr Wood was taxed as employment income.

HMRC were mistaken in their premise that UBS would not have any obligation to assist HMRC with their enquiries in relation to Mr Wood and the 2005 gilt option agreement. HMRC could not reasonably expect UBS to provide assistance beyond explaining how it fulfilled its best estimate obligation, but in any case, HMRC could still compel UBS to provide information in its possession under HMRC’s statutory information gathering powers and would not lose the ability to do that by exercising the 7A discretion.