This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Avoidance arrangements involving spread betting were subject to income tax and National Insurance contributions

By Mark McLaughlin, March 2020

Payments to individuals in respect of spread betting avoidance arrangements were liable to PAYE income tax and National Insurance contributions.    

The appellant company and its director shareholders participated in ‘spread bet’ and related option arrangements in the tax year 2012/13. The arrangements (known as the ‘Alchemy scheme’) broadly involved an individual user (typically a company director or key employee) entering into a spread bet contract with a financial bookmaker (H), to which the appellant made payments. The bet related to the performance of a basket of hedge funds over a given period. The user would also enter into a hedging contract (commonly a call spread option (CSO)). The outcome of the CSO was dependent on the performance of the same basket of hedge funds, but in reverse. The user would invite his employer (or sometimes an employee benefit trust) to relieve him of

Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Payment from former employer resulted from termination of employment
By Mark McLaughlin, May 2022
Payments for services of television presenter through personal service company were not subject to IR35
By Mark McLaughlin, July 2019
Employer Not Liable For Underpaid PAYE Following Tax Code Changes Sent Electronically
By Mark McLaughlin, March 2017
Payment For Client Connections Was Income From Employment
By Mark McLaughlin, March 2016
Compensation For Injury To Feelings Not Taxable
By Mark McLaughlin, June 2015