HMRC has decided to offer an amnesty to umbrella companies using Employee Benefits Trusts (EBTs) to boost their clients’ take-home pay, just months after announcing that it would shut the schemes down.
Provisions in the Government’s Finance Bill of 2011 squashed the offshore tax loophole exploited by EBTs, resulting in several major PAYE umbrella firms scrabbling around to restructure their organisations, leaving many of their clients out of pocket in the process. Umbrella companies were not the only firms to use EBTs, of course; several other high-profile businesses used the scheme to provide tax-efficient financial enhancements to their employees. One such – Ranger FC – is currently under investigation following the HMRC clampdown.
In a new press release, however, HM Revenue has announced that it now intends to allow companies an amnesty in order to repay outstanding NICs and tax. The statement said:
“HMRC is inviting employers, companies and other users of these arrangements to settle without recourse to litigation. This will minimise costs to both customers and HMRC. Employers and companies concerned with how their arrangements will be affected by the new legislation can respond to this opportunity to obtain certainty about their tax liabilities.”
HMRC’s Permanent Secretary for Tax, Dave Hartnett, maintained that the revenue would seek to resolve disputes without proceeding to litigation wherever that could be achieved within the law and “without damage to the Exchequer.” He revealed that HMRC was adopting a “proactive approach” to give customers a chance to work in partnership with the revenue and “establish how the facts of their case fit within the proposals.” He encouraged customers to come and discuss their situation.