HMRC said investors in the scheme used a Jersey registered limited partnership which claimed to be involved in creating and exploiting intellectual property from research into vaccines against diseases such as Flu, HIV, Hepatitis A and Hepatitis B.
The Vaccine Research Limited Partnership scheme, which was promoted by Matrix Structured Finance, sought to exploit a tax relief for spending on research and development (R&D) by claiming back all the tax due on an alleged investment of £114m and a first year trading loss of £193m.
However, the Upper Tribunal has now backed an earlier First-tier Tribunal (FTT) ruling in HM Revenue and Customs’ (HMRC) favour, finding that only £14m had been spent on R&D.
David Gauke, Financial Secretary to the Treasury, said: “This is the latest in a series of HMRC tribunal wins over avoidance schemes whose members try to exploit the rules for partnerships rather than accept their responsibilities as taxpayers.
“HMRC relentlessly pursues those who avoid tax and won’t hesitate to litigate if necessary. Investors in avoidance schemes should know by now that, if their case does go to the courts, they’re likely to lose.”
