HMRC has issued guidance on disguised remuneration schemes, warning that arrangements that claim to avoid the 2019 loan charge do not work.

In particular, the tax authority has warned against schemes with the following features:

* marketed from an off-shore location such as Cyprus, Malta or Isle of Man, claiming to avoid the 5 April 2019 loan charge legislation

* claiming that by entering the scheme, your disguised remuneration loans are paid off

* claiming that the scheme is not disclosable under the Disclosure Of Tax Avoidance Schemes regime, and may have benefited from a QC opinion

* may have professional marketing material, including a website.

HMRC says: "Beware of any arrangement that suggests a disguised remuneration loan can be ‘paid off’ or ‘repaid’ without a real economic consequence to the transaction – suggesting that the scheme user will not suffer any material financial cost (apart from fees).

"Any scheme or arrangement that claims to avoid the loan charge is tax avoidance. If it looks too good to be true, it usually is."

It adds: "It’s HMRC’s view that the disguised remuneration loan charge legislation addresses attempts such as these to avoid the rules, as it disregards any non-monetary repayments. This means the outstanding loan balance will be subject to the charge. The legislation also excludes any repayments connected to a tax avoidance arrangement."

The tax authority warns that if you sign up to such schemes, you're likely to:

* pay administration and promoters fees that cannot be recovered

"When setting up a Shared Service Centre, The Learn Centre played a key role in our award winning Payroll Academy, delivering a blended learning experience combining both classroom based training and an e-learning solution. The course delivery, the training materials and overall learning experience was excellent."

Michael Stevenson
Payroll Manager at Queen's University Belfast

View on Linkedin

Have a question?

Leave us your details or call us on 01798 861111

Ensure you're up to date and compliant

Are you happy for us to email you from time to time with payroll related information, legislation and updates?

Yes please, keep me up to date