Help with Disguised Remuneration Scheme

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Cashby
Cashby Posts: 52 Forumite
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in Cutting tax
My husband was paid through one of these schemes (when there were legal). Now the law has changed and he is liable for tax on income from the early years of 2000's.
I'm struggling to understand some of the terminology in the letter from the revenue. They have split the earnings into "Protected" and "Unprotected".
What do these categories mean please?
The letter seems to imply that he doesn't have to pay to tax on the unprotected bit yet but it may be held against him if he doesn't. Very confusing.
Help appreciated.

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  • agrinnall
    agrinnall Posts: 23,344 Forumite
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    I suspect he should seek professional help to ensure that he pays the right amount, no more and no less.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Cashby wrote: »
    My husband was paid through one of these schemes (when there were legal). Now the law has changed and he is liable for tax on income from the early years of 2000's.
    I'm struggling to understand some of the terminology in the letter from the revenue. They have split the earnings into "Protected" and "Unprotected".
    What do these categories mean please?
    The letter seems to imply that he doesn't have to pay to tax on the unprotected bit yet but it may be held against him if he doesn't. Very confusing.
    Help appreciated.

    This is a specialist area. I have encountered this recently and the one thing that I can say is that it seems to take a long time to reach a settlement. You may receive the correct answer on this forum but, as agrinall advises, no-one will be able to negotiate/minimise settlement in the way that an accountant, preferably with a tax specialism, could. The cost could be recouped many times over. Do not deal with HMRC by yourself on this.
  • uknick
    uknick Posts: 1,624 Forumite
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    Were they ever "legal"? If they were back in the early 2000s surely they can't come after you for the tax now. Or does tax legislation allow this, i.e. take retrospective legal action for something that wasn't illegal before. A very worrying thought.


    As agrinnall says, proper professional help will be needed.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    uknick wrote: »
    Were they ever "legal"? If they were back in the early 2000s surely they can't come after you for the tax now. Or does tax legislation allow this, i.e. take retrospective legal action for something that wasn't illegal before. A very worrying thought.


    As agrinnall says, proper professional help will be needed.

    Like most schemes they were legal until they weren't :)

    https://www.gov.uk/government/publications/tackling-disguised-remuneration-update/tackling-disguised-remuneration-update
  • Dead_keen
    Dead_keen Posts: 257 Forumite
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    Cashby wrote: »
    My husband was paid through one of these schemes (when there were legal). Now the law has changed and he is liable for tax on income from the early years of 2000's.
    I'm struggling to understand some of the terminology in the letter from the revenue. They have split the earnings into "Protected" and "Unprotected".
    What do these categories mean please?
    The letter seems to imply that he doesn't have to pay to tax on the unprotected bit yet but it may be held against him if he doesn't. Very confusing.
    Help appreciated.

    Can I suggest you have a look at the contractors forum here: http://forums.contractoruk.com/hmrc-scheme-enquiries/
  • Pennywise
    Pennywise Posts: 13,468 Forumite
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    There's also a new tax proposed to come in 2020 to charge tax on any outstanding loans, so even if HMRC don't manage to charge tax in the past years when the so-called "loans" were advanced, they'll get you in 2020 if the loan is still outstanding and hasn't been repaid.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
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    Pennywise wrote: »
    There's also a new tax proposed to come in 2020 to charge tax on any outstanding loans, so even if HMRC don't manage to charge tax in the past years when the so-called "loans" were advanced, they'll get you in 2020 if the loan is still outstanding and hasn't been repaid.
    hooray !!!
  • xylophone
    xylophone Posts: 44,412 Forumite
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    https://www.gov.uk/government/publications/tackling-disguised-remuneration-avoidance-schemes-overview-of-changes-and-technical-note/technical-note

    Take advice from a specialist ( Chartered Tax Adviser).

    https://core.tax.org.uk/
  • evildrome
    evildrome Posts: 1 Newbie
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    "Disguised Remuneration" schemes are now & have always been "Legal".

    Otherwise you'd be getting a letter about evasion from HMRC.

    There's an argument about whether they are "effective" but HMRC don't seem inclined to test their arguments in court (i wonder why).

    Because these schemes continue to be legal HMRC have come up with a cunning wheeze called the "Loan Charge" which seeks to retroactively tax loans taken out up to 20 years ago.

    The Loan Charge is being opposed by "BIG Group" and "LCAG".

    You should consider joining one or both of these groups.
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