UK law enforcers have recently cracked down on “disguised remuneration schemes”, with September 2019 being the deadline for those involved in such arrangements to provide information to HMRC.
What are disguised remuneration schemes?
Simply put, the term “disguised remuneration” refers to tax avoidance schemes (sometimes tax evasion schemes) that often take the form of employment or retirement benefits. They replace salaries, bonuses or other payments, allowing both the employer and employee to avoid tax.
Most commonly, this type of scheme is arranged by way of a third party “loan”. This disguises the transaction by way of a false promise of repayment. In reality, the loan will never be repaid, making these remuneration policies unlawful.
Schemes of this kind have often been disguised as Employee Benefit Trusts (EBTs). Many of these are managed legally, but others allow for the avoidance of tax and National Insurance contributions.
How can DBT & Partners help?
If you as a company or individual find yourself being investigated regarding disguised remuneration, our lawyers can help.
Many cases involve people who were not aware that the scheme in which they were involved was unlawful, so we can ensure that this is taken into account during the hearing of any case of disguised remuneration.
If you are unsure whether you have ever been part of a scheme of this kind, we can assist you as you investigate this and advise you on the best course of action afterwards.
Whether you are a business or an individual, we will be able to build a strong defence to aid you in any court hearing.
DBT & Partners has over 30 years’ worth of experience in defending clients against accusations of tax avoidance – including the handling of disguised remuneration settlements.
Disguised Remuneration: Frequently asked questions
What are the consequences of disguised remuneration schemes?
If you are not able to prove that you came about certain finances or assets in a legal manner, you may become the subject of an Unexplained Wealth Order (UWO).
Cases of this kind affect both individuals and organisations, and those involved may be required to face HMRC action by way of the 2019 Loan Charge.
Under new disguised remuneration rules, the Loan Charge affects those who have failed to arrange repayment of their loans by the allotted date. The charge equates to a lump “repayment” sum of the full amount that would be owed had the loan be arranged legally.
Depending on your individual circumstances, it may also be possible to arrange a disguised remuneration settlement with Her Majesty’s Revenue and Customs – but before you make contact to discuss this, it may be worth seeking legal assistance.
The disguised remuneration solicitors from DBT & Partners are highly experienced in working with clients who have been accused of tax evasion, fraud and cheating the public revenue.
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