HMRC targets employee benefit trusts for investigation

Some 12 000 investigations have been launched by HMRC into employee benefit trusts (EBTs) over the past five years with 2 420 started in 2018-19.

Pinsent Masons says the investigations into EBTs reflect the department’s focus on eliminating tax avoidance especially among highly-paid footballers and bankers.

As a result of the 5 April 2019 deadline to settle outstanding EBT cases with HMRC or face a new loan charge the international law firm said many individuals had come forward voluntarily to reach an agreement.

Josie Hills senior tax manager at Pinsent Masons said: ‘The thousands of cases show just how wide a net HMRC is casting when investigating EBTs. It has kept strong pressure on EBTs for several years now even after the new loan charge was first announced in 2016 to recoup what it sees as lost tax. Many have claimed that HMRC is being overly harsh...