The Pensioneer Trustee Company (Guernsey) Limited


Deadline looms for employee benefit trust users

March 6, 2015

Taxpayers who have been paid through disputed trust arrangements have been warned they may face payment demands from the UK tax authority after a settlement window closes this month.

Recent legislative changes will allow upfront tax demands to be used by HM Revenue & Customs to recover outstanding national insurance contributions, on top of income tax, that it claims are due from beneficiaries of employee benefit trusts.


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The threat of these demands, known as “accelerated payment notices”, may force the hand of taxpayers who have until March 31 to settle tax that HMRC considers due, said Dawn Register, a partner at accountants BDO.

“Individuals who have been involved in an EBT arrangement should consider the risks and benefits of using the settlement opportunity before the end of March,” she said. 

The Financial Times has seen a letter that HMRC has sent to users of EBTs in which it gives a warning alongside notification of the withdrawal of the settlement opportunity. “You have a simple choice: settle with HMRC or be prepared to litigate,” the letter said. 

Recipients who do not register their interest in settling by the end of this month “will lose access to the beneficial terms” that are currently on offer, the letter says. For those who register their interest, settlements must be made by July 31. 

Ms Register said that taxpayers face a dilemma. “If you settle now, there is no going back, no matter what happens in future cases.” On the other hand, she said, not settling could result in more severe tax and interest — plus penalty payments — in the future.

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The Pensioneer Trustee Company (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000.