Disguised Remuneration and the Loan Charge: Why it’s time for your clients to engage with HMRC
If your client has received one of these letters or you know they might have been involved in a Disguised Remuneration scheme, now is the time to act!
Montpelier Judgment – The Loan Charge Tax and Avoidance Schemes
HMRC still has many Loan Charge cases outstanding and is about to start pursuing them with vigour once more now they have more staff to do so.
What to do if your client receives a letter from HMRC about the Loan Charge offering a Standstill Agreement…
HMRC still have many Loan Charge assessment cases outstanding and are pursuing them with vigour. What should your client do if they receive a letter from HMRC about the Loan Charge offering them a Standstill Agreement?
HMRC use information received under the Common Reporting Standard to identify those ignoring the Loan Charge
HMRC are writing to taxpayers that have outstanding loans from their EBTs, EFRBs and other offshore structures. HMRC use information received under the Common Reporting Standard to identify those ignoring the Loan Charge. The origins of some of these arrangements go back to the 1990’s and have been “forgotten” – that is until now.
Where’s the Trust gone?
In what sometimes I can only see as a bid to try and outmanoeuvre HMRC, a Trust can be moved around the world. Some might say that having travelled from Hong Kong in the East to Grand Cayman in the west that I have travelled a few miles on business. But why do Trusts seem to move a similar distance between say the Channel Islands, the Mediterranean and the Caribbean
HMRC to undertake increased compliance activity on disguised remuneration
Some employers and individuals can expect contact from HMRC regarding the Loan Charge. Employers should have reported and paid the Loan Charge by now. According to HMRC, there are “number of those have not yet done so”. I am not at all surprised by this for a number of reasons. Whether its called Disguised Remuneration or the Loan Charge, its not going to go away.
EBT refunds – the clock is ticking
Anyone who has used a tax avoidance scheme that falls under the heading of Disguised Remuneration between 6 April 1999 and 5 April 2016 may now be entitled to EBT refunds. HMRC are refunding PAYE and NIC to companies who have settled on the basis of Voluntary Restitution
Loan Charge – what is a loan?
HMRC continue to pursue taxpayers who have received loans back from either in lieu of earnings of typically a contractor or back from an Employee Benefit Trust (EBT). The Loan Charge was effective from 30 September 2020 by which time HMRC were to be notified of all such loans and tax paid on them under the Disguised Remuneration rules. But for some, the issue has become what is a loan?
What HMRC giveth in 2020, will HMRC taketh away in 2021?
As part of the UK government’s support to the economy in 2020 in response to the pandemic, exceptionally HMRC have been making payments to taxpayers rather than collecting tax payments from taxpayers. Clearly, this cannot continue indefinitely.