Disguised remuneration: transfer of liability

05 December 2017

Guidance has been published which sets out how HMRC will collect outstanding tax liabilities from the appropriate person where it can't reasonably collect the liability from the employer.

The government is introducing legislation to tackle existing, and prevent future use, of disguised remuneration (DR) avoidance schemes.

The majority of this legislation has already been enacted. The remaining primary tax legislation was published in draft on 13 September 2017.

This technical note details the changes made to the draft legislation in response to stakeholder comments as well as a further clarification of when Part 7A applies. It also includes information on the changes to ensure the tax and NICs from a DR employment income charge are collected from the appropriate person.

It details the process for the transfer in three separate scenarios; where the employer no longer exists, is offshore, or can’t pay the liability. The note also contains the primary and secondary legislation that will be introduced to allow HMRC to transfer the liability from employer to employee.

Tackling disguised remuneration