Guidance released for tackling disguised remuneration

Guidance has been released in the draft Finance Bill 2017 outlining changes made to the measures to tackle disguised remuneration tax avoidance schemes since Autumn Statement 2016

Restrictions to income tax relief and corporation tax relief form part of the measures taken against disguised remuneration, while further guidance is provided on employment income provided through third parties and trading income provided through third parties.

Announced in the Autumn Statement 2016, the measure sees a charge on historic loans drawn from disguised remuneration avoidance schemes by self-employed users that remain unpaid on 5 April 2019.

Steps were also taken to make it less attractive for employers to use disguised remuneration avoidance schemes by denying tax relief for an employer’s contributions to disguised remuneration schemes unless tax and NICs are paid within a specified period.

The measure prevents corporation tax and income tax relief for employers’ payments from disguised remuneration tax avoidance schemes unless PAYE and NICs are paid at the outset, or within 12 months from the end of the accounting period for which the deduction has been claimed.

Several double taxation provisions are made in the guidance, including for earlier tax liabilities either paid or not yet due and overlapping charges.

The guidance can be read here.

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