HMRC attack on Employee Benefit Trusts

In December 2010, HM Revenue and Customs (HMRC) published new tax rules regarding the tax treatment of Employee Benefit Trusts (EBTs), Employer Financed Unapproved Retirement Benefit Schemes (ERFBS) and similar entities. These new rules, known by HMRC as “Disguised Remuneration”, are extremely complex and draconian, and are now part of tax law following Royal Assent being given in July to the Finance Act 2011.

Nigel Holmes, Director of Corporate Tax at Armstrong Watson, says, “We are aware that HMRC continues to look into such structures and the tax treatment thereof for transactions before these new rules became law. The taxman continues to look into both the tax of the companies setting up these structures and the individuals who have benefited from these; with correspondence being issued on corporation tax, PAYE/NIC and inheritance tax.”

Nigel warns, “Recipients of such letters should not just agree with what is being sought by way of tax, as prior to these new rules HMRC’s arguments are tenuous.”

Nigel advises, “Armstrong Watson has many years’ experience in dealing with the taxation implications of EBTs and can assist recipients of such correspondence to deal with their response to HMRC in order to close the enquiry or minimise the tax due. Furthermore, Armstrong Watson has some solutions on how to exit from such structures tax efficiently.”

If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletter


Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

CALL 0808 144 5575


Contact Us

All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.

Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW