Recent years have seen HMRC cracking down on so called "disguised remuneration" tax avoidance schemes, which allegedly attempt to disguise income (often by describing it as a "loan" that will never be repaid) in order to avoid income tax. Commonly used disguised remuneration tax avoidance schemes have included Employee Benefit Trusts (EBTs) and Employer Financed Retirement Benefit Schemes (EFRBS).
So far, HMRC have adopted a "carrot and stick" approach, offering more generous settlement terms to those taxpayers who voluntarily come forward about their tax avoidance schemes, rather than waiting to be formally investigated by HMRC. Benefits of settling voluntarily can include agreeing a payment plan with HMRC (rather than being required to pay the entire disputed tax sum up front), potentially paying a lower rate of tax on the disguised remuneration loan, and avoiding the HMRC loan charge which comes into effect on 5 April 2019.
However, time is running out, as the ability to take advantage of the HMRC settlement terms is due to expire on 5 April 2019. If you have any concerns that you may have been enrolled in a disguised remuneration scheme, it is therefore vital that you seek urgent specialist advice as soon as possible.
If you want to settle your use of a disguised remuneration tax avoidance scheme so that you do not have to pay the loan charge, you should contact us now and send us all the information we need as quickly as possible, and by 5 April 2019 at the latest.