Remuneration Trust Settlement Opportunity Update

The settlement terms make it clear that HMRC reserves the right to withdraw them at any time. The fact HMRC have not done so despite the recent Tribunal cases in their favour, which we discuss below, suggests HMRC will keep the terms available. However, whether the RTSO will be extended beyond 31 July is not known.

Recent developments

On 4 May 2022 the decision in CIA Insurance Services Limited v HMRC [2022] UKFTT 00144 (TC) was released. The case was heard by the same Judge that presided over the Strategic Branding case, and therefore, unsurprisingly, this broadly followed the decision in Strategic Branding, where the contributions were found to be earnings and subject to PAYE and NIC.

On 9 June 2022 another case involving remuneration trusts was released. In One Call Insurance Services Limited v HMRC [2022] UKFTT 184 (TC), while this decision was on a procedural point, the Judge made it clear that the decision in Strategic Branding was the more likely outcome on the substantial point.

In recent weeks, HMRC have also issued GAAR Notices of Final Decision to some companies who have undertaken Remuneration Trust planning. HMRC will now issue GAAR counteraction adjustments.

We are also aware of the very recent remuneration trust restructuring service offered in the market.

Two weeks to settle

We would recommend considering the settlement terms, particularly if you have any commercial transactions on the horizon, for example bank refinancing or business sale as, in our experience, the Remuneration Trust is very likely to feature in any due diligence exercise.

At BDO our Tax Dispute Resolution team has significant experience in helping clients resolve tax issues on Remuneration Trusts and HMRC’s approach to settling tax avoidance arrangements. Please get in touch with Jon Claypole, Karen Riley or Richard Philson for a no obligation discussion on your options.