HMRC Pursuing Its Own Staff in ‘Disguised Remuneration’ Crackdown

HMRC is pursuing its own staff, along with many thousands of other contractors, for money now regarded as being tax amounts that are owed and haven’t yet been settled.

The tax authorities are cracking down on forms of avoidance involving so-called ‘disguised remuneration’ schemes and tax-free loans paid from offshore trusts, which were, until recently, relatively commonplace as a means of making payments to contractors.

Laws on these issues were changed in 2016 and anyone who used tax-free loans as a form of disguised remuneration now finds themselves potentially in line to receive a sizable bill from HMRC.

As many as 50,000 contractors are believed to be on the list of targets relating to the ongoing clampdown, including many people who have previously worked for and with HMRC.

In fact, according to a recent report from the Telegraph, HMRC is “ruthlessly” pursuing members of its own workforce for money now believed to be owed as taxes in relation to loan payments and disguised remuneration schemes.

Several people have explained to the newspaper that they were hired as contractors by HMRC and paid in ways that are now considered to have amounted to tax avoidance.

An unnamed individual living in London told the paper that she now expects to be hit with demands for somewhere in the region of £140,000 by HMRC.

The schemes now being interpreted as forms of tax avoidance became popular around the turn of the century and were often being recommended by leading accountancy practices throughout the early 2000s.

Among the people unhappy with the position being adopted by HMRC on these issues is the MP and former government minister Sir Ed Davey.

He has described the approach being taken as “astonishing considering HMRC’s ruthless and unreasonable pursuit of people in this situation, when they didn’t break the law and followed professional advice”.

“What’s more, the evidence we’ve received also shows that these people declared all their arrangements in their annual tax return, so contrary to their claims not to know, HMRC were indeed aware contractors working for them were using these schemes,” Sir Ed is quoted as saying.