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Disguised Remuneration Settlement Opportunity – The clock is ticking

On 1st June 2018, HMRC offered a final settlement opportunity to those that have used schemes involving disguised remuneration (“DR”) loans (such as those taken from Employee Benefit Trusts) by extending the deadline for taxpayers to register their interest in exploring a settlement with HMRC by a further four months.

The current guidance explains that settling now could allow taxpayers to sidestep the impending April 2019 charge on outstanding DR loans, the potential costs of legal action, and also eradicates the possibility of further penalties or interest being incurred. In addition, you may be able to arrange a payment plan to pay the liability in instalments depending on your circumstances.

This settlement offer is not exclusive to Employee Benefit Trusts; it applies to a broad range of schemes including EFRBS and Contractor Schemes, and naturally the terms of settlement are different for employers, employees and contractors. You can find more detailed guidance on the settlement terms here although you may wish to consult with a tax adviser to gain certainty on your position.

The new deadline for registering for the settlement opportunity is 30 September 2018, by which time you must have provided HMRC with all the required information that they need (typically the taxpayer’s particulars, details of the scheme, and any reliefs claimed in connection with the scheme), otherwise HMRC may not be able to reach a settlement before the imposition of the April 2019 charge, so it would be prudent to take action as early as possible if this is something you wish to look into.

With the new April 2019 charge now looming we would expect that taxpayers who have outstanding loans connected to a DR scheme will be keen to assess their position and explore settling on these terms being offered while the opportunity remains open. We recently published a four-part series on the April 2019 charge (effective from 5th April 2019) which considered the likely impact of the application of the charge, and you can find it here.

If you or any of your clients are interested in assessing their position and discussing their options on this matter, or any other, please do not hesitate to contact us using the numbers detailed below.


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