On 30 September 2018 two deadlines will pass: one for providing information to HMRC in respect of Disguised Remuneration schemes to enable settlement to be reached by 5 April 2019, the other for correcting the position for undeclared offshore income and gains, yet there remains uncertainty around the interaction of the two settlement opportunities.

HMRC are encouraging users of Disguised Remuneration (DR)  and contractor loan schemes to reach a settlement on tax and NIC charges ahead of the loan charge which take effects on 5 April 2019. They will only guarantee that schemes can be settled in time if all relevant information reaches them by 30 September but this is not a hard deadline. Many scheme users will be sending information to HMRC right up to 30 September and possibly beyond, meaning their schemes may not be settled until early 2019.

Under Requirement to Correct (RTC) individuals and trustees with undeclared offshore income and gains have until 30 September to register under the Worldwide disclosure facility and then until the 29 December (or 29 November if already under enquiry) to make a full disclosure, or face severe penalties for failure to correct (FTC).

It is currently unclear from HMRC guidance how they will treat those who have registered for settlement in respect of DR and contractor loan schemes but have not yet reached a full and final settlement by either of the RTC deadlines. We expect that those most affected will be the trustees of offshore Employee Benefit (EBT) and Employee Remuneration trusts, but it may impact upon some individuals with more complex affairs than the standard loan from a trust structure.

Anyone concerned about FTC penalties applying despite having engaged in the DR settlement process are advised to contact HMRC now at This email address is being protected from spambots. You need JavaScript enabled to view it..

Links:

Disguised Remuneration settlement opportunity 

Requirement to Correct


 

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