Three tax avoidance schemes (‘Plans’) were entered into. Plan 5 and Plan 7 broadly involved shares in companies being issued to (among others) a number of individuals who were (or had been) employees of the appellant company. The employees agreed to a reduction in their pay, in return for dividends from the other companies. Furthermore, in Plan 7 a limited liability partnership (LLP) was incorporated, and participating individuals also received a profit share as members of the LLP. Plan 2 involved motor vehicles being provided for the use of certain individuals.

HM Revenue and Customs (HMRC) assessed income tax and National Insurance contributions in respect of the arrangements. The appellants’ appeals to the First-tier Tribunal (FTT) were dismissed. The appellants appealed.

The appellants could not challenge the FTT’s finding of fact that the Plan 5 dividends were, in substance, emoluments from,