disguised remuneration Articles

HMRC Wins Case Over Contractor Loan Scheme
marketing | 4 April 2019
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HMRC has won a tribunal case against a contractor loan scheme promoted by Hyrax Resourcing Ltd.

Hyrax Resourcing will now be forced to disclose the details of 1,180 ‘high earners’ that use the scheme and help the tax authority claim back more than £40 million in unpaid taxes.

The scheme in question was a disguised remuneration tax avoidance scheme that paid users in loans so that they could avoid paying income tax and National Insurance contributions on their earnings.

 

How the Spring Statement affects contractors

The Chancellor Philip Hammond delivered his annual Spring Statement on Wednesday, providing an update on the state of the economy and announcing several minor policy updates.

Although the Spring Statement doesn’t have the kind of wholesale policy announcements that are characteristic of the Autumn Budget, the Chancellor did have some important news for contractors and professional employment service providers.

Here’s a quick breakdown of the most important issues for the sector.

HMRC harpoons new ‘loyalty points’ umbrella scheme as a disguised renumeration tax avoidance scheme

HM Revenue and Customs has warned taxpayers that it is aware of a new ‘tax avoidance’ umbrella scheme in which contractors are paid, in part, with loyalty points that can be redeemed for ‘tax free’ income.

The tax authority has said that they consider the umbrella scheme to be against the rules of disguised remuneration and that users of the scheme will have their tax affairs investigated. 

Treasury: 2019 Loan Charge Will Go Ahead Despite Appeals
marketing | 4 April 2019
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The Treasury has confirmed that the 2019 Loan Charge will take effect this week, despite appeals from MPs, members of the House of Lords and Loan Charge campaigners.

HMRC released a last-minute statement on Wednesday, reminding Loan Scheme users that they have an obligation to pay the tax owed.

The statement urged users of disguised remuneration schemes to come forward and settle their debts by April 5. The tax authority also said that ‘flexible’ payment options are available to those that worry they will not be able to pay.

 

Contractors’ 2019 Loan Charge Settlement Deadline Approaches

Contractors who have participated in a disguised remuneration loan scheme have until 30 September 2018 to send settlement information to HMRC, or they risk paying an enormous bill in the 2018/19 tax year.

Disguised remuneration schemes are tax avoidance schemes in which participants receive income in the form of a ‘tax-free loan’, rather than traditional income.

HMRC counts this type of loan as income and says that tax is due on it. In 2017, the government introduced the ‘2019 loan charge’ to retrospectively collect tax money from disguised remuneration scheme losers.