Lease premium settlement initiative launched
HMRC have announced a time-limited opportunity to resolve a long-standing dispute over a scheme designed to reduce income tax and NIC liabilities on employer-provided accommodation.
The widely used scheme involved the use of lease premium arrangements, sometimes, but not always, in conjunction with Employee Benefit Trusts. HMRC have been challenging these arrangements and legislation was introduced in Finance Act 2009, s. 71 to put beyond doubt that the arrangements were ineffective.
For leases entered into prior to 22 April 2009, HMRC remains of the view that ‘lease premium’ arrangements do not succeed in their objective and that the amount being described as a premium is rent for the purposes of computing the taxable benefit. Employers or employees using the arrangements before the change in legislation are now invited to indicate their willingness to reach a financial settlement with HMRC so that cases can be resolved without the cost of defending a challenge through to the tribunal or the courts.