HMRC Spotlight 41: HMRC closing in on disguised remuneration

HMRC have released Spotlight 41 highlighting the Supreme Court’s decision, in favour of HMRC, that Rangers Football Club’s employment benefit trust scheme (EBT) does not work. Unfortunately for Rangers, the Supreme Court ruled that employment income paid from an employer to a third party is still taxable employment income and therefore, subject to tax and National Insurance contributions.

HMRC’s view is that the principle applies to a wide range of disguised remuneration schemes that operate through a third party, including:

• EBTs- Including variants where no loan is made.
• Disguised remuneration routed through employer-funded benefit trusts.
• A range of contractor loan schemes.

To read the full spotlight click here.

Aspire Comment

HMRC are trying to ensure that all remuneration is subject to tax as earnings as defined in section 62 of the Income Tax (Earnings and Pensions) Act 2003. Provisions were introduced in the Finance Bill 2017 whereby all loans or debts from a disguised remuneration scheme will be taxed as earnings if they haven’t already been repaid on or before 5th April 2019.

If you believe you may be receiving payment through a disguised remuneration scheme please contact Aspire so we can provide you with your available options.