HMRC clarifies ‘tax avoidance’ stance
Contractors who declared to HMRC what they received through disguised remuneration schemes over the last 20 years can settle their bills on the terms offered before the rules changed in 2017.
Since April 1999, up to 40,000 members of these schemes were paid in loan advances, rather than salary, and paid less income tax as a result.
The Revenue wrote to those affected earlier this year, asking for a response - or a payment to be made on the outstanding balance - ahead of a deadline on 5 April 2019.
In a notice sent out from HMRC on 15 April 2019, it said the new rules will not apply to those who made declarations before the deadline.
The old rules means those affected by the crackdown can pay a lower rate of income tax on the disguised remuneration and will not have to pay the extra charge under the new rules.
The tax authority received powers to pursue contractors and their employers in Finance Bill 2017, with the new rules taking effect from 5 April 2019.
MPs had previously expressed concerns over the "retrospective nature" of the new rules, which are estimated to net the Treasury around £3.2 billion.
Two-thirds of that figure is expected to come from employers that operated the scheme over the past two decades.
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