Mark Reid v HMRC: How the Taxman is Blurring the Lines Between Advice and Crime

A High Court Judgment With Lessons for Every Contractor

The High Court’s judgment in Mark Martin Reid v The Commissioners for HMRC & Ors (\[2025] EWCR 4) is a wake-up call for contractors. It shows how HMRC is not only pursuing historic “disguised remuneration” (DR) cases but also shifting tactics—deliberately eroding long-standing safeguards and blurring the lines between legitimate advice and criminality.

And if it feels a bit like the old Disney Robin Hood movie—where the Sheriff of Nottingham isn’t content to collect taxes fairly but instead takes every last coin, even from the church poor box—you’re not imagining it. The Sheriff’s job was to uphold the law, but his zeal and overreach made him the villain. In today’s world, some contractors will see HMRC playing a similar role.

From Tax Dispute to Criminal Conspiracy

Mark Reid, a solicitor, and others are accused of promoting the Pyrrhus Capital Ltd (PCL) scheme, which offered contractors with old DR loans a way to repay them before the 2019 Loan Charge deadline. The idea: take out a new “PCL loan” to clear the old one, avoiding a huge tax hit.

HMRC’s position? The repayments were a sham, designed to mislead, and part of a plan to cheat the public revenue. Instead of fighting it in the tax tribunal, HMRC framed it as a criminal conspiracy.

That shift is no accident—it’s a strategy.

Breaking Down the Overreach

Turning Advice Into Evidence

Normally, anything you discuss with your lawyer is protected by legal privilege—a cornerstone of justice. HMRC convinced the court to apply the Crime-Fraud Exception, which strips that protection away if the advice is allegedly linked to wrongdoing. The problem? HMRC only has to show it’s more likely than not, not prove it beyond reasonable doubt. In practice, that means they can raid a law firm, get client files, and use them in a criminal investigation before anyone has been found guilty of anything.

Shifting the Battleground

DR cases used to be about interpreting complex tax law in specialist tax tribunals. Now HMRC is rebranding them as criminal cases, moving the fight into the Crown Court—where the stakes are years in prison, not just back taxes.

Retrospective Law With a Long Memory

The Loan Charge applies to loans dating back decades. Contractors who thought they had “closed the book” on old arrangements are being pulled back in. New repayment schemes—no matter how carefully structured—are being painted as part of the original “avoidance” plan.

Why This Should Concern Every Contractor

This isn’t just about DR schemes. The bigger story is the precedent being set:

• HMRC is using powers designed to catch serious criminals to go after complex tax planning cases.
• They’re eroding the confidentiality between client and adviser—a foundation of the legal system.
• They’re framing disputed tax positions as “fraud”, forcing contractors into a criminal defence posture before those tax questions are even resolved.

And here’s the Robin Hood twist—except in this retelling, it’s the Sheriff writing the rules, deciding what counts as “dishonest”, and using that to grab whatever documents and powers he wants. The line between enforcing the law and bending it to achieve an outcome is getting harder to see.

The Case Isn’t Over

It’s important to note that this judgment did not end the matter. It dealt specifically with whether certain seized documents could be withheld from HMRC under legal privilege—and the court decided they could not. The underlying criminal case is still scheduled for trial in March 2027, meaning the core allegations remain unresolved.

Mark Reid therefore still has the opportunity to fight back, whether by appealing parts of this ruling or by challenging HMRC’s case in the forthcoming trial. This is far from a concluded matter—it’s one battle in what could be a long-running legal war.

The Takeaway

The Reid case shows that HMRC is no longer just collecting tax—it’s reshaping the rules of engagement. By blurring the lines between civil tax disputes and criminal prosecutions, they’re making it easier to seize documents, pierce privilege, and put individuals under maximum pressure.

For contractors, that means:

• Any historic DR involvement is a live risk, no matter how you’ve tried to fix it.
• “Quick fixes” to avoid the Loan Charge could draw HMRC’s attention—and be reframed as part of a dishonest plan.
• Legal advice is no longer untouchable if HMRC can convince a judge it’s connected to alleged wrongdoing.

Bottom line:

This isn’t just a tax enforcement story—it’s a power shift. And like the Sheriff of Nottingham in Disney’s Robin Hood, HMRC is no longer just knocking on the door for what’s due—it’s pushing inside, opening the cupboards, and deciding for itself what you’re allowed to keep.