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Countdown for Disguised Remuneration Settlement Opportunity Registration (this is relevant for EBTs, EFRBS, Contractor Loan and all other employment based Schemes)

6 March 2018

HMRC published the Disguised Remuneration settlement terms back in November 2017 and we now have HMRC’s online Settlement registration process up and running for all disguised remuneration schemes. However, only 4 months now remain for employers or contractors to register for this opportunity with registration closing on 31 May 2018.

The key dates are:   * 31 May 2018 –  Settlement registration.

* 30 September 2018 –  Provision of settlement particulars for schemes entered into.

* 5 April 2019 –  Agree the liability and payment of any tax/NIC arrears (or at the very least the entering into of an agreed payment plan).

The 5 April 2019 is also a key date for the disguised remuneration ‘Loan charge’ which will be levied where loans are outstanding at that date on such schemes.

Please be aware that the terms apply for any scheme involving Disguised Remuneration. For most this may take the form of an EBT, EFRBS or Contractor loan scheme but it is not limited to these arrangements. Any scheme where there is a potential for disguised remuneration legislation applying will also need to be considered.

Compared to previous specific EBT and EFRBS settlement opportunities, it is notable that HMRC have indicated that they will be taking a much firmer stance in relation to grossing-up, county court costs (NIC), benefit in kind tax offsets and IHT exit charges. Contractors have received clarification that settlements will be based on net monies received (i.e. after scheme fees). 

As is always the case when reaching settlement – the devil is in the detail in terms of making sure the client’s liabilities are no more than is properly due.

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