A complex system used by UBS to avoid paying income tax on bonus payments to more than 400 senior employees in London has been ruled legal even though the judge described it as “a carefully planned tax avoidance scheme”.

In a judgement delivered Wednesday, but not previously reported, Lord Justice Rimer in the Upper Tribunal of the Court of Appeal also said that Deutsche Bank - which had operated a similar plan through one of its group companies - had grounds to appeal an earlier decision on taxes that had gone against it.