Disguised remuneration schemes under fire

A technical consultation Tackling Disguised Remuneration has been launched by HMRC. It covers the changes announced in the 2016 Budget to be introduced in Finance Bill 2017 as well as an early draft of the legislation.

Schemes involving a loan by a third party to an employee resulting in that individual being indebted to the lender will be treated in the same way as if the third party had made the loan directly.

Another gateway will be added to ITEPA 2003 s 554A to ensure that loans to close company participators fall within the rules.

A new provision will ensure that the writing-off or release of disguised remuneration loans will result in a tax charge.

Tax relief for employers’ contributions to disguised remuneration schemes will be denied unless employment taxes and National Insurance are paid at the same time.

HMRC’s power to transfer income tax and...