Settlement opportunity for users of remuneration trust tax avoidance schemes
Find out the new settlement terms available for companies or individuals who've used certain tax avoidance schemes involving remuneration trusts.
If you’re using any tax avoidance schemes HMRC strongly advises you to withdraw from them and settle your tax affairs.
HMRC is aware of a type of tax avoidance scheme which involves a particular type of trust, commonly known as ‘remuneration trusts’. These schemes claim that by making contributions to a remuneration trust, users can get a range of tax advantages.
Remuneration trust schemes do not work to deliver the ‘tax free’ environment they say they do.
In HMRC’s view the scheme design may have a fundamental flaw that means there is no valid transfer of funds to the trust.
Settlement opportunity
HMRC has published which may allow you to resolve any remuneration trust related tax issues.
The settlement opportunity will be open for applications until 31 July 2022. It is only for individuals or companies whose scheme use meets certain criteria which are set out fully in the terms.
It does not apply to any individual or company under criminal investigation by HMRC.
It may also not apply if an appeal related to the tax consequences of scheme use has been referred to a tribunal.
If a court rules in the future that tax is due on an alternative basis, the settlement terms will be withdrawn and HMRC will expect any scheme users who have not already settled to pay tax in accordance with the court’s ruling.
How to apply for the settlement opportunity
You must:
- follow the settlement terms to decide which basis applies to you
- complete your own tax calculations
- give HMRC your completed calculations before 31 July 2022
Settling will give you certainty over your tax affairs regarding the arrangements and prevent further investigations.
If you’re having difficulty in making a tax payment you should ask us about affordable monthly payment options. We’ll always try to work with you to agree time to pay based on your income and expenditure.
Time to pay arrangements are based on an individual’s specific financial circumstances, so there is no ‘standard’ time to pay arrangement. We look at what you can afford to pay and then use that to work out how much time you need to pay and over what time period.
If you do not settle your tax affairs
We will continue to investigate and litigate users of remuneration trust avoidance schemes. If you’re using this type of scheme as a company or company director, you may find that you’ll be charged for:
- Corporation Tax
- S455 CTA10 Tax
- PAYE tax
- National Insurance contributions
- Inheritance Tax
If you’re using this type of scheme as a self-employed individual or partnership, deductions you’ve claimed may not be allowable expenses, and you may also have to pay Inheritance Tax.
It may be more expensive for you to close any of your open enquiries formally than it is to settle under this opportunity.
Contact HMRC
If you already have one, you can speak to your HMRC contact about applying for the settlement opportunity. If you do not have an HMRC contact, you can send an email to: CA_RTSettlements@hmrc.gov.uk or telephone: 03000 590 964.