Settling Disguised Remuneration avoidance cases
20 July 2018
HMRC has updated the payment terms for settlement of disguised remuneration avoidance cases, ahead of the loan charge which arises in April 2019.
Anybody with expected current year earnings or self-employed profit of less than £50,000 will be able to agree an instalment period of up to five years. This can be done without your client having to provide any further detailed supporting information. To take advantage of this, the person must no longer be part of any tax avoidance scheme.
Forward interest will be payable on any instalment plan, so it is always in the individual’s best interests to agree to a shorter manageable instalment plan, so they pay less interest overall.
There are no defined minimum or maximum time periods for payment arrangements, so if someone has a higher income, or may need a longer payment plan, HMRC will be able to consider this on a case by case basis and will:
Take into account any changes in circumstances and discuss options to make sure the case is managed in the best way
Always take a realistic look at income, assets and essential outgoings, alongside what is owed and any other debts
Always consider how much an individual is able to pay, and over what period
Expect the outstanding amount to be paid in the fastest possible time
Even if someone thinks they have no realistic way of paying what they owe, they should still call HMRC as soon as possible on 03000 534 226 to discuss options.
Full guidance on ‘Disguised remuneration: settling your tax affairs’ can be found on GOV.UK.
Provide information in settlement cases by 30 September 2018
All relevant information must be provided for HMRC to calculate settlement of any disguised remuneration avoidance schemes by 30 September 2018. This will ensure it has time to process the settlement before the loan charge begins on 5 April 2019.
Disguised Remuneration Talking Points webinar
Join HMRC for the next Disguised Remuneration Talking Points webinar on 1 August, midday to 1 pm. Settlement calculations will be looked at in detail and there will be the opportunity to ask questions about any part of the process.
The format of this webinar will differ from the usual Talking Points format, so with this in mind, please could attendees join 10 minutes early, where possible, to review the examples in the handout material.