EBTs offered settlement terms

HMRC has announced that employers with unresolved enquiries into EBTs can settle now and avoid further formal action on HMRC’s part.

HMRC is going to write to all employers before the end of August 2011 to invite them to discuss settlement. If HMRC does not receive a response before the end of December 2011 then it will continue with its formal enquiry into the EBT.

Employers will have to pay the tax, Class 1 NIC and appropriate late payment interest and will be able to claim a corresponding Corporation Tax deduction where normally permitted. In addition, HMRC will give credit where a benefit in kind charge arose.

Employers with unresolved enquiries into EBTs should speak to their tax advisers straightaway to consider whether it is appropriate to settle and the benefits of settling now over HMRC pursuing its case under HMRC’s published ‘Litigation and Settlement Strategy’.

Please contact John Hood on 020 7182 4747 or your normal Gabelle contact for further information.