New FAQs on disguised remuneration

The third frequently asked questions document was published by HMRC on 5 July extending some of the exclusions from the regime and clarified interactions with other legislation.

These provisions tackle arrangements used to disguise remuneration aimed at avoiding or deferring income tax or NIC. The rules are primarily aimed at arrangements involving employee benefit trusts (EBTs) and employer financed retirement benefit schemes (EFRBS) but are broadly drawn to impose immediate up front income tax charges where a “relevant third person” takes relevant steps to allocate or earmark cash or assets or make them available by way of loan or distribution.

The latest amendments provide protection for rewards provided by group companies, share incentive and genuine deferred remuneration arrangements. Nevertheless the rules remain comprehensive and warrant careful attention by practitioners advising on and implementing  employee reward schemes and arrangements. Our tax experts can help with this process.