The “Bluebox” scheme, promoted by NT Advisors, involved participants making a £500,000 gift to charity which was then used to channel money tax free to their Jersey trust with “virtually no benefit” to charity.
A First-tier Tribunal rejected a claim for £200,000 of tax relief and 60 participants are now expected to pay the taxes due.
HMRC said three individuals had already paid £24m in tax prior to the hearing.
Financial secretary to the treasury, Nicky Morgan said: “The government has provided charitable tax reliefs to encourage people to give to charities. We will not tolerate abuse of these incentives for the purposes of tax avoidance.
“This was another scheme that wasn’t worth investing in and, as well as the fees investors will have paid to the promoters, they will now have to pay the tax owed as well as interest.”
Previously overturned tax avoidance schemes promoted by the firm, operated by controversial “pay day loan” entrepreneur Matthew Jenner, include “Working Wheel”, in which participants claimed to be second-hand car dealers.
In January, HMRC claimed it had “saved the country £100m” by defeating an appeal by Jenner against a ruling the body made against another of its illegitimate schemes.
Branded 'Project Corbiere', the scheme involved transferring millions of pounds of UK government bonds, known as gilts, backwards and forwards to the British Virgin Islands to manufacture an unwarranted tax deduction of £1.2m.
At the time, HMRC said some 230 wealthy individuals, who first used the scheme in 2005, had already settled their tax bills. But it added that around £80m “could have been lost to the UK” if this latest appeal had been successful.
In 2009, Jenner and his business partner Anthony Mehigan famously set up the Cup Trust charity, in which donors benefitted from tax deductions of up to £55m.
The Cup Trust requested £46m in Gift Aid from HMRC although accounts revealed that only £135,000 of the £177m donated to the charity was actually given to good causes. Almost all the rest of the money was spent buying UK government bonds.
