People who need to settle should contact HMRC now and send all the information required as quickly as possible, and by 5 April 2019 at the latest.
People can still benefit from the published settlement terms if they contact HMRC with a genuine intent to settle before 5 April 2019 and provide the relevant information, even if settlement cannot be reached until after that date.
How scheme users can settle If a scheme user is already speaking to someone in HMRC about their use of a disguised remuneration scheme, they should inform them they want to settle their disguised remuneration tax affairs.
If they’re not already speaking to someone at HMRC, they can contact us by emailing:
• cl.resolution@hmrc.gsi.gov.uk for contractor loan schemes • ca.admin@hmrc.gsi.gov.uk for all other disguised remuneration schemes
There is full guidance for people who want to settle their tax affairs on GOV.UK, including information about what information they need to send by 5 April 2019, and how they can pay what they owe.
Difficulty paying what they owe People don’t need to pay the full settlement amount in one go or on 5 April.
If anyone has difficulty paying what they owe, we can help by spreading payments across a number of years. There is no maximum time period for payment arrangements. HMRC will not force anyone to sell their main home to pay their disguised remuneration debts.
Even if scheme users feel they cannot pay what they owe, they should still call HMRC as soon as possible.
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Managed service company legislation (Spotlight 32) 2 May 2019
HMRC has won a case in the First-tier Tribunal (FTT) involving attempts to avoid PAYE Income Tax and Class 1 National Insurance contributions on employment income.
HMRC regularly publish ‘Spotlights’ which includes information you should be aware of about tax avoidance schemes that it believes to be live and widely available, to help those using them to avoid tax.
The latest ‘Spotlight’ is about a case where HMRC successfully argued that the managed service companies (MSC) legislation (Chapter 9 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 and equivalent National Insurance contributions legislation) applied to arrangements established and run by a third party - Costelloe Business Services Limited (CBS).
Following an appeal, the Upper Tribunal (UT) agreed with the original FTT decision that the appellant’s companies were operating as MSCs.
In addition to the original decision, the UT considered 2 additional areas.
Firstly, the definition of a MSC provider as ‘a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals’. This decision confirms HMRC’s view that if the answer to both of the following questions is yes, a person is a MSC provider: • does the person promote or facilitate the use of a company? • does that company provide the services of individual? Secondly, the UT decided that ‘influences’ or ‘control’ has a wider meaning than that expressed in the FTT decision. In this case, Costelloe Business Services Limited influenced how payments were made to workers through the use of a standard product, by causing the workers to receive wages and dividends instead of just wages.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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