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 (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, 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 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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