The Finance Act 2017 and the Finance Act (No. 2) 2017 included changes to the tax legislation proposed in 2016 to deal with further developments in tax avoidance, and as part of HMRC’s anti-avoidance measures in respect of disguised remuneration schemes.
In summary, the Disguised Remuneration Finance Bill 2017 implemented loan charges to be made against tax schemes where the income paid is disguised as a loan (currently the most common form of tax avoidance method).
We refer to our webpage which deals with legal changes in respect of disguised remuneration schemes here.
You can also visit our web ages to read more information on the effect of the loan charges which will arise and be sought as an accelerated payment notice as a result of these recent legislative changes, and the potential transfer of liability from the employer to the employee.
- in the event that such disguised remuneration, or rather the tax scheme being used for such purpose was not disclosed before the end of 2018 then from April 2019 the legislation imposed loan charges on such sums drawn via accelerated payment notices.
- in the event disclosure of a disguised remuneration tax scheme was not made then the accelerated payment notice served by HMRC may be backdated (it applies to ongoing schemes commenced from 1999) and, ultimately, if such sums are not paid then HMRC can present a winding-up petition or bankruptcy petition on the basis of such liabilities now arising.
This may have huge financial consequences to companies and directors, who are the most common participators in such tax schemes together with the risk of personal claims from HMRC.
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. We regularly deal with HMRC – often in negotiation of 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. Whatever your issue, our experts are here to help.