Wealth Design News

HMRC has announced a new and final settlement opportunity for employers, employees and contractors who have used disguised remuneration schemes in the past. This will give them a chance to settle their tax liability now before a new loan charge is introduced. Typically, disguised remuneration schemes involve an employer paying a contribution to a third-party, usually an employee benefit trust, rather than paying an employee directly. The trust then pays the employee in the form of interest-free loans with terms that mean they will never be repaid in the recipient’s lifetime, thereby avoiding the income tax and NICs that would otherwise arise from the payments.

Those who would like to take advantage of this opportunity have to register their interest with HMRC by 31 May 2018 and make a full disclosure by 30 September 2018. Meeting these deadlines will give those involved the time they need to complete the settlement before the new loan charge becomes effective on 5 April 2019.