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ARTICLE · 26 NOVEMBER 2013

HMRC EBT Settlement Opportunity

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Following the introduction of the disguised remuneration rules in 2011, HMRC promised to vigorously pursue existing employee benefit trusts on the basis of its long held view that income tax and National Insurance Contributions should have been paid when funds were allocated to an EBT.

United KingdomTax
Tim George
Tim George
James Frampton
James Frampton
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Following the introduction of the disguised remuneration rules in 2011, HMRC promised to vigorously pursue existing employee benefit trusts ('EBTs') on the basis of its long held view that income tax and National Insurance Contributions ('NICs') should have been paid when funds were allocated to an EBT.

In 2011 HMRC launched the EBT Settlement Opportunity (the 'Settlement Opportunity') which offered employers the opportunity to settle such tax liabilities, thereby avoiding the risk of a time consuming and costly HMRC enquiry and potentially allowing for distributions to be made from the EBT and the EBT to be wound up.

It is clear from HMRC's highly publicised recent settlement with JP Morgan Chase and from our own experience acting for employers, employees and trustees that settlements can be made on extremely advantageous terms. The Settlement Opportunity therefore warrants detailed consideration.

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