Heather said, “Any ‘disguised remuneration loans’ which are still outstanding on 5 April 2019 will be charged to tax, in full, as income for 2018/19. As that date gets closer, those affected are becoming increasingly vociferous about the consequences, and perceived unfairness, of the charge”
Heather also said, “Disguised remuneration loan schemes involved an employee receiving part of their former salary as a loan, typically either from an employee benefit trust or an offshore umbrella company. It was tacitly understood that the loan was not intended to be repaid. HM Revenue & Customs has never accepted that the schemes worked, although it was undeniably slow to investigate some of those that were fully disclosed on tax returns.”
She added, ‘”Bluntly, disguised remuneration loans were about dressing up part of an indivdual’s remuneration as a free gift on which tax would never be paid; in my view, this was aggressive avoidance. A large part of any blame should lie with those who devised and promoted the schemes, although those who entered into them were, at best, naive or optomistic in thinking that they would not have to pay tax in the end.”
Heather said, “Those who are affected need to take a realistic look at the options available to them. The guidance produced by the Low Incomes Tax Reform Group is unbiased and practical, even if the consequences will still be difficult for many individuals. But above all, individuals should not be tempted by those who are still offering ways around the loan charge. Any apparently magic solution is, at this stage, unlikely to make the problem disappear in a puff of smoke.”
For more information, please contact Heather Self.