[2025] UKUT 00278 (TCC)

For Airedale, the disputed tax years are 2008/09, 2009/10, 2011/12, 2012/13 and 2013/14, and the review decision letter was written by Ms Fletcher. The letter followed a similar format to that of Ms Robinson’s review decisions for the Fluid claimants. The letter noted that the claimant had made contributions to BBTs and subsequently the Airedale EFRBS, and that HMRC had issued various Regulation 80 determinations and s. 8 decisions. As with the review decisions for the Fluid claimants, the letter then set out details of the settlement agreement, Airedale’s claim for repayment under the DRRS, and HMRC’s decision on 17 February 2022 finding that Airedale was eligible for only a partial repayment of the sums paid under the settlement agreement.

For the year 2008/09, HMRC had issued a Regulation 80 determination in respect of four named individuals. Ms Fletcher considered that this was capable of being uplifted to the higher amount of PAYE specified for those four individuals in the settlement agreement. She accepted, however, that Airedale was entitled to a repayment in respect of the PAYE for two individuals included in the settlement agreement who were not named on the Regulation 80 determination. She also accepted that the full amount of the NICs included in the settlement agreement was repayable, on the basis that HMRC had not issued a protective writ and was out of time to do so at the point of settlement.

For 2011/12, it was noted that a Regulation 80 determination had been issued in an amount exceeding the relevant settlement sum. Ms Fletcher therefore considered that the §3.1.27.3 condition was not met for that year. In respect of NICs, however, although a s. 8 decision had been adopted for a sum exceeding the NICs element of the settlement, a protective writ had not been issued, so Ms Fletcher went on to consider whether there had been reasonable disclosure in respect of that element in the settlement.

For 2012/13 and 2013/14, Ms Fletcher accepted that HMRC had made no Regulation 80 determinations or s. 8 decisions. It was therefore necessary to consider reasonable disclosure for those years also.

Ms Fletcher concluded that the reasonable disclosure condition under DRRS §3.1.27.5 was not met for any of the relevant years. She noted that Airedale had disclosed the use of an EFRBS in the notes to its corporation tax computations for the relevant years. She said, however, that:

“The notes do not give the names of the persons to who the loans were made to or give information that would make it apparent that a reasonable case could be made that the amounts concerned were payable to the commissioners. The note specifically refers to ‘for the benefit of employees and persons connected with them’ but does not give the names of those individuals as required in the legislation at section 20 Finance Act 2020.”

As regards the relevant self-assessment tax returns, those referred to transactions entered into with the Airedale EFRBS. Ms Fletcher said, in that regard:

“Having examined the information submitted, I am of the view that by looking at the Self Assessment returns in this case, the loan cannot be established and to whom it has been made, the relevant arrangements and whether income tax was due on the loan … subsequently, this does not constitute reasonable disclosure.

Based on the information provided I do not consider that HMRC were told enough to know that the individuals received loans for the full amount and that it was chargeable as earnings.”

In response to representations made by Airedale that (among other things) HMRC’s interpretation of the “power to recover” test was incompatible with the statutory definition in s. 20(3) of the Finance Act 2020, Ms Fletcher made essentially the same point as Ms Robinson had done in her Fluid London review decision cited at §46 above.