Employers and beneficiaries of employee benefit trusts can expect to be pursued for tax by HMRC following last week’s court victory over Rangers FC, and should settle immediately, says a leading accountancy firm.
Blick Rothenberg says clubs, companies and individuals misusing EBTs should expect a crackdown from HMRC following the Supreme Court’s ruling on the Rangers case.
The accountancy firm says those disguising remuneration through an EBT should expect Follower Notices and Accelerated Payment Notices as the Revenue seeks to recoup tax due.
Rangers used EBTs to channel around £50m of payments to players.
Blick Rothenberg partner and tax investigations specialist Gary Gardner says: “HMRC believed the use of EBTs was a process for disguising remuneration, and it is clear from the resounding unanimous agreement that the Supreme Court agreed with this assertion.
“This may have been the end of the Rangers case, but it is expected that in the coming months HMRC will cast the net far and wide to start going after other beneficiaries and employers misusing EBTs. This will see HMRC issuing Follower Notices and Accelerated Payment Notices, requiring the payment of tax up front before individual cases have been settled.
“HMRC have taken a tougher stance on settlements, but they are still going to welcome disclosures at this stage and timings are extremely important in this situation with the introduction of a loan charge on all outstanding disguised remuneration loans as at 5 April 2019.
“This win for HMRC will further strengthen their hand in the ongoing war against tax avoidance, now supported by additional legislation designed to crack down on avoidance in all its forms, and on those facilitating it.”