CIOT raises concerns over disguised remuneration
legislation
Tax update - 02/06/2011
The approach taken by the government to prevent tax avoidance
through 'disguised remuneration' payment is far too complicated,
says the CIOT.
The Chartered Institute of Taxation (CIOT) is concerned that the
Finance Bill, which comprises legislation governing third parties
who avoid paying income tax on employment rewards, is too
complex.
The legislation - which also details those who avoid pensions tax
relief restrictions - runs to 59 pages, more than double the
original 25 pages. The pages include 14 different tax avoidance
tests setting out when the new exclusions will apply.
Chairman of the CIOT’s Employment Taxes Sub-Committee, Colin
Ben-Nathan, said, “We support the Government in tackling tax
avoidance involving rewards paid via third parties but we think the
legislation in the Finance Bill is far too complicated and risks
creating problems as well as solving them.
“We think that employers will face real difficulties in trying to
assess how they stand with this new legislation and that they are
likely to need to take advice to arrive at a considered view.
Mr Ben-Nathan went on to say that the CIOT suspected that many
employers will 'want to seek clearance from HMRC on their
particular arrangements,' and that the body 'wondered whether HMRC
has the resources to cope and what the turnaround time will
be.'