30 September deadline for ‘disguised remuneration’ schemes
25 September 2018
The clock is ticking for anyone who has used a ‘disguised remuneration’ scheme to arrange a settlement or face new tax charges next April.
The government has said loans or debts from a disguised remuneration scheme – where ‘income’ is replaced with ‘loans’ – will be taxed as earnings if they haven’t been fully taxed or repaid on or before April 5 2019. Those who have used disguised remuneration have until just 30 September to register with HM Revenue & Customs.
While thousands have already contacted HMRC to arrange settling, tax expert John Whelan from My Digital Accounts, warns there could be thousands more still left to come forward.
Whelan said: “Time is running our for people who have used these various loan schemes, with celebrities particularly at risk. Some of these stars have made millions and could now be bankrupted through this clampdown. This also applies to contractors who have used Employee Benefits Trust schemes, often without knowing it.”
New legislation introduced by former Chancellor George Osborne means these loans have become subject to a charge, which can only be cancelled if a settlement is reached with HM Revenue & Customs.
Whelan continued: “HMRC will consider allowing flexible payments over a period of time, but anyone affected needs to act quickly. The deadline also applies to anyone who has failed to declare all their offshore income, and those who don’t come forward to declare this kind of tax avoidance could face massive penalties or even imprisonment.”
He added: “The taxman wants his cut so that could include seizing assets, such as houses, so a settlement with HMRC will always be the best way out. The government has proved that these tax avoidance schemes don’t work.”
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