If a tax scheme is solely set up for the purpose of not paying tax then the answer to this question is yes, although we stress that there is a grave difference between tax avoidance and tax evasion (which is a criminal offence).
A disguised remuneration scheme by its very definition is a scheme set up to disguise income being paid and therefore comprises a scheme which is designed to avoid the tax liability otherwise payable to HMRC, which is tax avoidance and prohibited under UK law.
- however not all tax schemes are set up solely for the purpose of disguising remuneration and there can be many circumstances which warrant the use of a tax scheme, which are not illegal as part of a firm’s tax planning strategy;
- overseas employees can quite often benefit from certain types of tax arrangement and it is quite clear from all parties’ perspective that paying a dividend to yourself out of a company, as opposed to a salary, is the most common example of a tax strategy which is permitted by HMRC.
Each and every tax scheme needs to be analysed in its own right and there is never a single yes or no answer to this question, although the answer is more obvious in respect of some disguised remuneration tax schemes than others.
At Francis Wilks & Jones we have considerable experience of tax legislation and defending claims by HMRC or liquidators appointed over companies which face such difficulties and we can assist you with any negotiations with HMRC, including accelerated payment notices, any disguised remuneration scheme issues, personal liability notices, VAT security or any other claim by HMRC, including appeals to tax tribunals or insolvency claims.