The March 2010 Budget included an announcement that the government will be taking action to tackle tax avoidance arrangements using employee benefit trusts (EBTs) and similar vehicles. The government will consider introducing legislation to counter arrangements which have the purpose of "avoiding, deferring or reducing liabilities to income tax and national insurance contributions or avoiding restrictions on pensions tax relief". If legislation is introduced, the March 2010 Budget Report notes that will take effect from April 2011.

This announcement is not surprising, as HM Revenue and Customs had already announced an intention to pursue companies which are using EBTs and family benefit trusts to avoid tax on benefits provided to employees (or their dependants). (Family benefit trusts are similar to EBTs, but provide benefits only to dependants of employees, rather than employees themselves.) For more details, see Legal update, HMRC avoidance spotlight on family benefit trusts and Legal update, Taxpayer and HMRC withdrew their High Court appeals in Sempra Metals case on family benefit trusts.

See PN03 - Protecting Tax Revenues: Future action on the use of trusts and other vehicles to reward employees, March 2010 Budget notes and March 2010 Budget - Chapter 5, Budget Report- paragraph 5.63.