Swiss-based Vitol, a leading oil trader, is set to have negotiations with the U.K. taxman after HM Revenue & Customs issued a demand for back taxes over an offshore pay scheme that let its top staff avoid millions of pounds in tax, the Sunday Times reports.

The U.K. newspaper says the issue at the Geneva-based company centers around its use of an employee benefit trust, or EBT--a type of scheme used by many companies and established with the full knowledge of the HMRC--which it set up in the 1990s.

Investment bank J.P. Morgan, thought to have one of the largest EBTs, is close to agreeing a settlement over 500 million pounds ($807.6 million) that the government claims it is owed, according to the report.

Vitol Chief Executive Ian Taylor is reported as saying that once the JP Morgan agreement is settled it would provide a "template" for such situations and Vitol accordingly must and will abide by legislation and "will have to pay something."

Vitol closed its EBT scheme when the government introduced legislation last year that outlawed the trusts, says the report.

Vitol wasn't immediately available for comment. HMRC couldn't comment for legal reasons, the newspaper adds.

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