A test case bought by an IT contractor over changes to offshore taxes has failed to overturn a retrospective action by HM Revenue and Customs (HMRC), highlighting the importance of using reputable tax solutions.

HMRC's decision will see residents who had previously put their money into offshore trusts based in tax havens made to pay these back.

The case found that, in retrieving the tax that was avoided through the scheme designed and marketed by Isle of Man-based Montpelier Tax Consultants, the claimant's human rights had not been impinged.

While the High Court was told that the action could cause some to lose their homes or face bankruptcy, it ruled that it was proportionate in the relevant circumstances.

HMRC's actions were authorised under the 2008 Financial Act as part of anti-tax avoidance legislation.

Lawyers for defendant Robert Huitson said that they would ask the Court of Appeal to hear the case due to its wide-reaching implications.

Stephen Timms, financial secretary to the Treasury, said earlier this month that offshore tax evasion was morally unacceptable, highlighting the importance of using reputable tax solutions.