Disguised remuneration loan schemes – still time to use the settlement opportunity

Last year HMRC published a settlement opportunity for taxpayers who had used disguised remuneration loan schemes. HMRC has just published an update to the guidance at Disguised remuneration: settling your tax affairs

Under the original guidance, those wishing to use the settlement opportunity were required to register an interest with HMRC by 31 May 2018. The main change in the updated guidance appears to be that this deadline has gone and the settlement opportunity is still open – taxpayers are told to register their interest “as soon as possible”. 

Disguised remuneration schemes often involve employees and contractors being paid in loans through structures such as offshore employee benefit trusts. In Finance Act 2011, the government legislated to clamp down on the use of these schemes. Further, a new loan charge on such schemes will apply from April 2019, introduced by Finance (No 2) Act 2017. HMRC is encouraging those who have used schemes to settle their tax before the loan charge comes into effect. 

Taxpayers who wish to use this route to settle must, after registering an interest with HMRC, provide detailed information by 30 September 2018. The liability should be agreed and paid (or a payment arrangement put in place) by 5 April 2019. These deadlines have not been changed in the update. 

The guidance gives full details of how to use the settlement opportunity and what information to provide. Agents can deal with this on their clients’ behalf.