Following last week’s announcement of an independent review of the disguised remuneration loan charge, the government has invited interested parties to submit documentary evidence to the review by 30 September. Submissions should be sent by email to secretariat@loanchargereview.org.uk.
The lack of a call for evidence in the original announcement was a source of concern for Keith Gordon, barrister at Temple Tax Chambers, who also expressed misgivings about the relatively short timetable and the fact that the charge has not been suspended for the review.
Gordon’s greatest concern, however, is the focus in the terms of reference on individuals who have ‘directly entered’ into disguised remuneration schemes. Gordon believes this fails to distinguish between, on the one hand, those such as directors and shareholders who sought a tax-efficient way to extract bonuses from their companies and, on the other, contractors who were forced or actively encouraged to enter schemes by their employers or agencies. His hope is that the use of the word ‘directly’ is not intended to exclude contractors and those who had the least knowledge of the arrangements and little choice about whether to use them.
‘If taxpayers are to get the independent review which they deserve and which they were promised’, Gordon said, ‘then all aspects of the review need to be subject of a proper discussion’.
David Pett, also of Temple Tax Chambers, notes that many individual participants benefitted only marginally from the arrangements, with the greater part of the perceived savings going to promoters and advisers in fees. Pett believes that these promoters and advisers ‘have effectively avoided sanctions’ in relation to these schemes, as existing laws do not allow HMRC to pursue them for the tax now due from individuals.
For many years, David Pett points out, HMRC was slow to challenge disguised remuneration schemes, respond to disclosures of their intended use, or open enquiries into returns which made full disclosure of them. As far as individual scheme participants were concerned, this only served to reinforce their view of such schemes as ‘legitimate’ and ‘acceptable’ to HMRC.
Following last week’s announcement of an independent review of the disguised remuneration loan charge, the government has invited interested parties to submit documentary evidence to the review by 30 September. Submissions should be sent by email to secretariat@loanchargereview.org.uk.
The lack of a call for evidence in the original announcement was a source of concern for Keith Gordon, barrister at Temple Tax Chambers, who also expressed misgivings about the relatively short timetable and the fact that the charge has not been suspended for the review.
Gordon’s greatest concern, however, is the focus in the terms of reference on individuals who have ‘directly entered’ into disguised remuneration schemes. Gordon believes this fails to distinguish between, on the one hand, those such as directors and shareholders who sought a tax-efficient way to extract bonuses from their companies and, on the other, contractors who were forced or actively encouraged to enter schemes by their employers or agencies. His hope is that the use of the word ‘directly’ is not intended to exclude contractors and those who had the least knowledge of the arrangements and little choice about whether to use them.
‘If taxpayers are to get the independent review which they deserve and which they were promised’, Gordon said, ‘then all aspects of the review need to be subject of a proper discussion’.
David Pett, also of Temple Tax Chambers, notes that many individual participants benefitted only marginally from the arrangements, with the greater part of the perceived savings going to promoters and advisers in fees. Pett believes that these promoters and advisers ‘have effectively avoided sanctions’ in relation to these schemes, as existing laws do not allow HMRC to pursue them for the tax now due from individuals.
For many years, David Pett points out, HMRC was slow to challenge disguised remuneration schemes, respond to disclosures of their intended use, or open enquiries into returns which made full disclosure of them. As far as individual scheme participants were concerned, this only served to reinforce their view of such schemes as ‘legitimate’ and ‘acceptable’ to HMRC.
