Another spotlight on disguised remuneration schemes

Spotlight 52 highlights wins for HMRC in two First-tier Tribunal disguised remuneration cases Hyrax Resourcing Ltd (TC7025) and Curzon Capital Ltd (TC6949). Both concerned the routing of loans through offshore trusts and were held to be notifiable under the disclosure of tax avoidance schemes (DOTAS) regime.

In the spotlight HMRC states these decisions confirm its view that ‘contrived arrangements involving employment income related loans are notifiable under DOTAS’. 

The department warned that it would pursue promoters and enablers of such schemes. They should consider the DOTAS rules to decide whether the arrangements they are marketing should be notified to HMRC. 

After a notification participants would be sent an accelerated payment notice to bring into immediate charge the disputed tax and National Insurance.

HMRC said it will ‘examine whether DOTAS should apply to individual cases’. It advised anyone using this kind of arrangement to ‘withdraw from it and settle’ their tax affairs...