HMRC have released Spotlight 52: Disclosure of Tax Avoidance Schemes: tax avoidance using offshore trusts, following two recent FTT cases where it was held that disguised remuneration arrangements should have been notified under DOTAS.

In HMRC v Hyrax Resourcing Limited  and HMRC v Curzon Capital Limited [2019] TC06949 the FTT decided that the disguised remuneration (DR) arrangements being promoted were notifiable under the Disclosure of Tax Avoidance Schemes (DOTAS) legislation. 

  • The arrangements used involved individuals receiving earnings by way of a small taxable element and the rest as a loan which was ultimately owed to an offshore benefit trust in a low or no tax jurisdiction.
  • The loans are provided on terms that mean they are not repaid in practice.

In the spotlight HMRC say that the FTT decisions confirm their view that contrived arrangements involving employment income related loans are notifiable under DOTAS and remind scheme users that:

  • Following a DOTAS notification, HMRC will consider issuing Accelerated Payment Notices to bring into immediate charge the disputed tax and National Insurance contributions that are due.
  • The loan charge applies to all DR loans made since 6 April 1999 if they were still outstanding on 5 April 2019, and anyone with an outstanding loan now has to report and account for their loan charge.

This is the sixth spotlight issued by HMRC in the past six months which deals with Disguised Remuneration schemes. HMRC continue to urge scheme users to contact them about settlement and the deadline for completing a settlement on these types of arrangements is now 31 August 2019.

Links to our guides:

Disguised Remuneration
A guide to everything you need to know about disguised remuneration schemes, the loan charge, and how to reach a settlement with HMRC.

Disguised remuneration final settlement opportunity
A detailed guide to the November 2017 final settlement opportunity for all disguised remunerations schemes.

Penalties: Enablers of Tax Avoidance (subscriber version)

External link:

Spotlight 52: Disclosure of Tax Avoidance Schemes: tax avoidance using offshore trusts

 

Comments (0)

Rated 0 out of 5 based on 0 voters
There are no comments posted here yet

Leave your comments

  1. Posting comment as a guest.
Rate this post:
Attachments (0 / 3)
Share Your Location