Disguised remuneration

Anti avoidance and employment taxation: an ET4B summary

Posted by David on November 01, 2014
HMRC, National Insurance, News articles, Payroll, Status / Comments Off on Anti avoidance and employment taxation: an ET4B summary

In recent months you may have read about the introduction of various anti-avoidance measures which have been introduced in April 2014. Examples include measures to target onshore and offshore employment businesses, as well as new rules to be considered for LLPs.

Unfortunately much of the material issued is highly complex, and (of necessity) somewhat long-winded. Whilst much of this seems disconcerting, for many readers it will be simply a case of ensuring they have a high-level understanding of each measure, and then focusing on any aspects of particular relevance to them.

With this in mind, ET4B has produced a number of individual summary guides, which outline in simpler terms (and hopefully in plain English) the key issue of each new measure, i.e. what behaviours etc each seeks to challenge, what is the potential result, how this interacts with other similar legislation, and (most importantly) who is likely to be liable if the particular rules etc apply. In order to put this into context, our guidelines also compare and contrast how each new measure ties in with certain other employment tax ‘anti-avoidance’ initiatives (some of which were brought in play a number of years ago).

We would invite you to click on the links below, in order to obtain our ‘bite sized’ summary of each measure.

IR35 Intermediaries Legislation
Managed Service Companies (MSC) legislation
Workers engaged by Onshore agencies on a ‘falsely self-employed’ basis
Workers supplied via Offshore agencies
Overseas loan schemes
‘Disguised remuneration’ legislation
Payments via Limited Liability Partnerships (LLPs) to ‘salaried’ members or¬† partners

We hope you find this information of use. If you do require our input e.g. to help in understanding any of the measures in more detail, please contact us at ET4B.

Although the documentation reflects our current understanding, please also bear in mind that some of the legislation has yet to be enacted, and (in some areas) precise details and guidelines have yet to be clarified.

 

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Offshore Loan Schemes in firing line: update

Posted by David on January 22, 2014
News articles, Payroll / Comments Off on Offshore Loan Schemes in firing line: update

In September 2013 HMRC announced that ‘offshore loan schemes’ are to be actively challenged. More recently in December 2013 HMRC then stated that it was to place such schemes in its ‘Spotlight’ i.e. in effect making a conscious effort to ‘warn’ taxpayers about their concerns in this area.

This move is mainly targeted at smaller self-employed or limited company contractors who (intentionally) operate via these avoidance arrangements. The schemes usually involve entering into a contract of employment with an offshore employer and receiving a substantial proportion of the payment for ones services in ‘loans’. Unsurprisingly (as the services are invariably performed in the UK) HMRC contests whether the schemes work.

HMRC alludes to a recent Tribunal case which was ‘comprehensively and robustly’ decided in HMRC’s favour, and concludes that contractors should now voluntarily opt to settle the PAYE duties that it considers due. Following the usual ‘carrot or stick’ approach, HMRC has also said that participants can otherwise expect to be notified that their returns are under enquiry and/or receive assessments for what HMRC sees as unpaid duties. Voluntary settlement would of course potentially mitigate any penalties chargeable.

The initiative is in addition to HMRC’s proposed tightening of the rules in relation to ‘Overseas Employment Intermediaries’ (some of whom engage large numbers of relatively low paid ¬†workers, under offshore NIC avoidance arrangements, without even telling the workers they are doing so) and does appear to be part of a concerted move to target ‘offshore avoidance’.

If you require further details please contact the ET4B team.

 

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ET4Bs Autumn 2011 Newsletter

Posted by David on November 01, 2011
CIS, Expenses and benefits, HMRC, National Insurance, News articles, Payroll / Comments Off on ET4Bs Autumn 2011 Newsletter

015_ET4B Autumn 2011 Newsletter

This Newsletter provides an update on the RTI proposals, VAT on salary sacrifice, third party benefits and much more.

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ET4Bs Spring 2011 Newsletter and Budget update

Posted by David on May 01, 2011
Expenses and benefits, Flexible Benefits, HMRC, National Insurance, News articles, Payroll, Termination Payments / Comments Off on ET4Bs Spring 2011 Newsletter and Budget update

014_ET4B Spring 2011 Newsletter_Budget update

This Newsletter provides topical details of recently new and updated rules, including details of HMRC’s attempts to prevent ‘disguised remuneration’, its rather confused thinking on childcare tax reliefs, and the pension tax relief limitations.

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