Employee Benefit Trusts
The EBT Settlement Opportunity (EBTSO) was first launched in 2011 and provided the framework under which HMRC was prepared to settle open enquiries into Employee Benefit trusts (EBT) and similar arrangements without the need for litigation. These arrangements typically sought to avoid or defer the payment of Income Tax or National Insurance Contributions and may also have generated a claim for Corporation Tax deductions for payments into the trust.
The EBTSO was never meant to be an open-ended opportunity and companies who wished to take advantage of the beneficial terms of the EBTSO had to do so by 31 July 2015. HMRC has now published new guidance entitled Employee Benefit Trust settlements after 31 July 2015. The guidance confirms that taxpayers can continue to settle their affairs with HMRC even though the EBTSO has been withdrawn. However, the terms of settlement will be less generous than was previously the case.
Any taxpayers that still need to settle their tax affairs should be aware that HMRC is actively litigating against those who did not have an EBT settlement in place before 31 July 2015.