Qubic Tax Limited – Pension and Tax Mitigation Schemes

FS Legal’s specialist tax team has advised a large number of former clients of ‘niche’ and ‘innovative’ tax advisory firm Qubic Tax Limited (Qubic) concerning a variety of different tax mitigation schemes promoted to high net worth individuals and private companies.

It is anticipated that all of those who used Qubic’s schemes are in the process of being identified by HMRC following the issuing of valid notices requiring disclosure of commissions paid by Qubic and associated companies to introducers between 2013 and 2017 (Qubic Tax Ltd and others v Revenue and Customs Commissioners [2020] UKFTT 215 (TC), [2020] SFTD 769).

Qubic are typically introduced through established advisers such as accountants who may themselves be members of referral networks such as ‘Probiz’ or ‘Added Value Network’. In many cases that we have seen, the end client is completely unaware that their accountant has received an undisclosed commission or ‘kick back’ paid to them by Qubic for making that introduction or recommendation (e.g. Chancery Client Partners Ltd and others v MRC 957 Ltd and others [2016] EWHC 2142 (Ch)).

Our team has advised on a number of schemes operated by Qubic including Gold bullion/EFRBS (also known as “Incentives and Rewards – Providing Assets”), and a scheme involving payment of employment rewards by creation and sale of unfunded pension obligations.

Identical schemes have been considered by the General Anti-Abuse Rule (“GAAR”) Advisory Panel, which found that they were contrived and abnormal and as such fell foul of the GAAR legislation. This opens the way for HMRC to take enforcement action against the companies and individuals who used the schemes. The Panel’s decisions are here: GAAR Advisory Panel opinion of 18 July 2017: employee rewards using gold bullion – GOV.UK (www.gov.uk), and  GAAR Advisory Panel opinion of 11 February 2022: Rewards via creation and sale of pension obligation – GOV.UK (www.gov.uk).

We have also advised clients who have seen their companies collapse into liquidation and who have then been the subject of director disqualification proceedings as a result (e.g. Re Avacade Ltd, Secretary of State for Business, Energy and Industrial Strategy v Lummis and another [2021] EWHC 1501 (Ch), Secretary of State for Business, Innovation and Skills v Akbar and others [2017] EWHC 2856 (Ch)).

Time to act is very limited. If you wish to discuss your own position with us, please contact us urgently. We operate on a fully contingent funding basis for the vast majority of our cases.

To discuss your specific circumstances in more detail without charge or obligation please call Julia Norris or Kit Sorrell at our Manchester Office.

FS Legal Solicitors

FS Legal is one of the very few law firms in the country specialising in claims arising from tax avoidance and mitigation schemes. We have a leading team of expert lawyers who have been ranked by the independent legal directories Legal 500 and Chambers & Partners in this specified field.

Chambers & Partners wrote:

  • “The team is especially skilled acting on high-value tax-related disputes”
  • “[FS Legal] regularly handles matters for high net worth individuals and private businesses and is particularly skilled at acting on high-value tax-related disputes”

Legal 500 comment:

  • “FS Legal has a national reputation for high-profile, multi-million pound “big ticket” litigation, in particular tax negligence claims having recovered seven figure settlements”
  • “FS Legal is described by some as “the only pure financial services litigation firm outside London – its team is the envy of many of the top law firms it comes up against”
  • “Litigation boutique FS Legal is highly regarded as a claimant firm, particularly in tax negligence and professional services disputes”

Tax Advice

FS Legal works with a very select team of specialist tax advisers who assist our clients in extracting themselves from the scheme in question and also in ensuring any settlement with HMRC is achieved on the best possible terms.

Funding

We understand that whether it is a personal or business matter, funding is a key concern. We have a variety of funding options available to seek to remove the risks and costs from our client. Unlike most firms, we are able to operate the vast majority of our cases on a contingent (“no-win, no-fee”) basis.
Because professional negligence cases are intricate and require specialist knowledge, we offer a free, no obligation, and confidential advice service to all our prospective new clients.