HMRC has extended the deadline for contractors and others who have used disguised remuneration loan schemes by an additional four months to take advantage of a settlement opportunity announced late last year, by extending the deadline for providing information to 30 September
Disguised remuneration schemes typically involve employees and contractors being paid in loans through structures such as offshore employee benefit trusts. In Finance Act 2011, the government legislated to clamp down on the use of these schemes. Further, a new loan charge on such schemes will apply from April 2019, introduced by Finance (No 2) Act 2017. HMRC is encouraging those who have used schemes to settle their tax before the loan charge comes into effect.
HMRC’s settlement scheme opened in November 2017 with a registration and information deadline of 31 May for taxpayers wishing to settle liabilities in connection with disguised remuneration schemes on favourable terms before the new loan charge comes into effect on 5 April 2019.
In an update, HMRC is now saying that all required information must be sent to HMRC by a new deadline of 30 September 2018.
The guidance states: ‘To start settling your tax affairs, you should register your interest with HMRC as soon as possible and provide all of the required information by 30 September 2018.’
HMRC warns that if it does not receive all the information by 30 September it may be unable to reach a settlement before the loan charge arises. If possible, individuals should also send their tax calculation for each year.
The liability should be agreed and paid (or a payment arrangement put in place) by 5 April 2019. These deadlines have not been changed in the update.
Report by Pat Sweet