Investment bank UBS could be in line for a potential tax refund after a tribunal ruled that bonuses paid into an offshore tax avoidance scheme were not liable for income tax. But Deutsche Bank lost its appeal in its appeal, which was heard at the same time.
With around £100m involved in each case, the amounts of income tax at 40% (top rate at the time the bonuses were paid in 2002-3) and NICs due from the banks' employees were close to £50m.
In UBS Services & DB Group v HMRC [UKUT 320 (TCC)] the Upper Tribunal overturned a first-tier tribunal ruling in February that more than staff at the Swiss bank were liable to pay income tax and national insurance contributions on the bonus.
The bonus was made in the form of redeemable shares (“re...