Changes to Disguised Remuneration legislation

The tax treatment of Disguised Remuneration tax schemes is constantly being revised and reinterpreted by legislation published on an almost annual basis via the annual Finance Acts.  These changes most recently were incorporated by the Finance Act 2017 and the Finance Act (No.2) 2017, both of which sought to deal with double taxation and, more importantly for Disguised Remuneration schemes, a loan charge of 50% to be imposed as an Accelerated Payment Notice from 5 April 2019.

Not all tax schemes are designed to avoid tax or disguise remuneration, but there is of course a common perception that they are all aimed at tax avoidance rather than as part of a tax planning strategy.

The Finance Act 2017 and the Finance Act (Number 2) 2017 import further amendments to the Income Tax legislation and seek to impose penalties on beneficiaries of schemes or redefine how such tax schemes are interpreted for the purpose of determining whether they constitute Disguised Remuneration tax schemes.

The most important effect of these changes is that personal liability for the loan charge of 50%  will likely be imposed as an Accelerated Payment Notice from April 2019.

Accordingly it is vital that if you are participating in such a tax scheme then you seriously consider whether disclosure is appropriate before the end of 2018, when the window may close for disclosure of such arrangements.

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.

Please call any member of our Tax Disputes team for your consultation now on 020 7841 0390.  Alternatively email us with your enquiry at info@franciswilksandjones.co.uk and we will call you back at a time convenient to you.