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HMRC is aware of tax avoidance arrangements used by owner managed companies and their directors. The arrangements are used to reward a director for the services they provide to a company. This is done in a way that seeks to avoid paying Income tax and National Insurance contributions, while obtaining Corporation Tax relief at the same time.
HMRC strongly believes these arrangements do not work. We’ll seek to challenge anyone promoting or using these arrangements and we’ll make sure the correct tax is paid.
The arrangements involve a company creating an unfunded pension obligation to pay one or more of their directors a pension. This is to create an expense in the company accounts to reduce the company’s profit. The intended result of this step is to reduce the amount of Corporation Tax payable.
Tax avoidance is the process of manipulating tax rules to reduce the amount of tax payable and obtaining a financial advantage that was never the intention of the legislation. A typical.
The government has published the National Insurance Contributions Bill, which legislates reliefs for employers of veterans and those operating in Freeports, as well as for the self-employed isolating due to COVID-19. The Bill will also enable upcoming changes to the DOTAS scheme to apply to national insurance avoidance.
Announced in the Queen’s speech, the National Insurance Contributions Bill was laid before the House of Commons on 12 May as HMRC published guidance on its measures.
The Bill legislates reliefs on employers’ national insurance contributions (NIC) aimed at encouraging businesses to operate in the UK’s new Freeports and boosting the employment of UK military veterans.
OVERVIEW
Despite much anticipation to the contrary, the UK Government decided to repeal all but one of the reporting triggers under the UK regulations implementing EU Council Directive 2018/822 on the reporting of cross-border tax arrangements (DAC6), which will no doubt be a welcome development for taxpayers and their advisers.
IN DEPTH
The decision emerged as a last-minute surprise on 31 December 2020, when the UK Government published, and brought into force on the same day, the International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations 2020 (2020 DAC6 Regulations). Although the UK Government’s public statements had previously left some wriggle room to amend or repeal the original implementing regulations, it had implied that such an outcome would only be likely in the event of a “no deal” Brexit. Thus this near full-scale repeal has come as a surprise to many, as the United Kingdom and the European Union had agreed a Brexit deal the
Thursday, January 7, 2021
Despite much anticipation to the contrary, the UK Government decided to repeal all but one of the reporting triggers under the UK regulations implementing EU Council Directive 2018/822 on the reporting of cross-border tax arrangements (DAC6), which will no doubt be a welcome development for taxpayers and their advisers.
IN DEPTH
The decision emerged as a last-minute surprise on 31 December 2020, when the UK Government published, and brought into force on the same day, the International Tax Enforcement (Disclosable Arrangements) (Amendment) (No. 2) (EU Exit) Regulations 2020 (2020 DAC6 Regulations). Although the UK Government’s public statements had previously left some wriggle room to amend or repeal the original implementing regulations, it had implied that such an outcome would only be likely in the event of a “no deal” Brexit. Thus this near full-scale repeal has come as a surprise to many, as the United Kingdom and the European Union h