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Employee benefit trusts need to be settled by 31 July deadline, warns HMRC

Time is running out for companies who have used Employee Benefit Trusts (EBTs) as part of schemes to minimise employer national Insurance contributions (NICs) and income tax bills, who need to settle by the end of the month or face litigation, warns HMRC as 31 July deadline nears

Companies who had used EBTs had to register their intention to settle with HMRC by 31 March 2015, in order to benefit from more settlement favourable terms of the EBT Settlement Opportunity (EBTSO). This included options such as tax relief on the amount settled with HMRC will be backdated allowing the business to reduce the cost of their interest payments on the overdue tax to HMRC.

However, a formal settlement with HMRC must be agreed by 31 July 2015, including any ‘time to pay’ arrangement where payment cannot be made in full.

HMRC has warned that employers who fail to agree to an EBT settlement before 31 July will be brought before the tax tribunal as quickly as possible.

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