Section 17 - Current use of Disguised Remuneration avoidance schemes
Published 23 April 2020
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Current use of DR avoidance schemes
We have identified 12 new DR schemes since April 2019 aimed at individuals, which have been used by around 8,000 individuals, over 3,000 of whom are using an avoidance scheme for the first time.
Following the introduction of the anti-avoidance rules in 2011, and the Supreme Court decision against Rangers Football Club, we do not consider it likely that these promoters consider the schemes to be effective. The schemes often only exist for a short period before the arrangement is closed and promoter sets up a new arrangement.
To tackle these new schemes, we will seek to identify them early and challenge on the basis that Income Tax and NICs are due because the schemes give rise to an employment income charge or the 2011 anti-avoidance rules apply.
We will also focus on using the legislative powers introduced since 2013 against promoters. Linked to our actions, around 20 of the highest risk promoters have ceased promoting avoidance schemes. Five of these were significant promoters of DR schemes, which have ceased activity altogether, as well as a number of other smaller promoters.
Our activity is concentrated on the remaining 14 promoters who we believe are responsible for the majority of DR schemes presently being sold. We have an operational team dedicated solely to bringing maximum pressure to bear on these promoters, and in 2019 to 2020 we will double the resources involved in tackling promoters.
We are currently applying the POTAS legislation against a major promoter, against whom a Conduct Notice under that legislation is at present in force. We are also actively investigating a number of promoters with a view to applying the Enablers legislation, for the first time.
HMRC has made three successful complaints to the Advertising Standards Authority about misleading advertising. These rulings set precedents so other avoidance promoters cannot make the same claims about similar arrangements. The ASA has issued guidance about advertising tax schemes.
Recent history of avoidance
At Spring Statement 2019, the government published a document setting out HMRC’s and the government’s approach to tackling avoidance, which includes a list of recent measures. The document can be found at .