The UK’s highest court is to hear an appeal by HMRC over two offshore schemes used by banks to shield staff payments from tax.
The tax office will attempt to convince the Supreme Court that UBS and Deutsche Bank used the schemes to avoid tax in 2003 and 2004, the FT reports.
Employees received shares as restricted securities in order to bypass income tax, with the banks then paying bonuses into the schemes without paying income tax or national insurance contributions.
UBS won a previous tax tribunal hearing, which HMRC failed to overturn in the Court of Appeal. In the tribunal, HMRC claimed UBS avoided paying £36.9m of tax and £12.7m of national insurance contributions on bonuses worth £92m.
Deutsche Bank lost its tribunal case but successfully appealed at the Court of Appeal.
Around 2,700 employees who used such schemes – known as employee benefit trusts – were contacted by HMRC last year to settle disputes or face legal action.
In February, a BBC investigation found HSBC had helped private clients avoid millions in tax through its Swiss business.