HMRC has confirmed that the date for withdrawal of transitional relief on investment growth, which was set at 30 November 2016 has been pushed back to 31 March 2017, in a bid to encourage users of disguised remuneration schemes to settle any outstanding tax liability.

The latest HMRC spotlight publication, which covers tax avoidance schemes that HMRC believes are open to challenge, gives details of the withdrawal of the relief currently available under paragraph 59 of Schedule 2 to Finance Act 2011 (para 59).

The withdrawal of the relief was announced in March at the Budget, as part of the package of changes to tackle the use of disguised remuneration avoidance schemes, such as employee benefit trusts (EBTs) and contractor loans.

The transitional relief was intended to work alongside the EBT settlement opportunity, which closed on 31 March 2015.

HMRC says the government wants to ensure all users of disguised remuneration schemes have the opportunity to settle with HMRC before the transitional relief in para 59 is withdrawn. Therefore an amendment to Finance Bill 2016 has been tabled to extend the date for the withdrawal to 31 March 2017.

The amendment, once agreed by parliament, will mean that users who want to benefit from the transitional relief on investment growth in Para 59 must have settled on or before 31 March 2017.

The guidance states that HMRC ‘continues to believe that disguised remuneration schemes don’t work, and will challenge these rigorously’. It advises users of such schemes to get in touch with their HMRC contact if they are already in discussion about a disguised remuneration scheme, or email [email protected]

HMRC Spotlight 31: change of date for withdrawal of transitional relief on investment growth is here