Summary 
 
Loyalty bonus payments by a platform service provider to investors were liable to the deduction of basic rate income tax at source as being qualifying annual payments. 
 
Background 
 
In March 2013, HM Revenue and Customs (HMRC) announced (in its Brief 04/13) that from April 2013 it expected financial intermediaries making certain payments to investors to deduct basic rate tax at source from such payments (with investors being expected to declare any higher rate liability on the payments in their tax returns). 
 
The respondents (‘HL’), a ‘platform service provider’ to investors, did not accept that this obligation applied to ‘loyalty bonus’ payments which it made to investors. HMRC and HL reached a temporary agreement to avoid the necessity of multiple appeals. Under