Time Running Out for Superstars To Settle Tax Affairs

Time is running out for celebrities and sports stars to avoid huge fines after they avoided tax by replacing ‘income’ with ‘loans’. 

From this Sunday, September 30, anyone who has used a ‘disguised remuneration’ scheme must arrange a settlement, or face new tax charges next April.

Cheshire-based tax expert John Whelan from My Digital Accounts said:

“Time is running out for people who have used these various loan schemes, with celebrities particularly at risk. Some of these stars have made millions and could now be bankrupted through this clampdown, so they need to seek urgent advice. This also applies to contractors who have used Employee Benefits Trust (EBT) schemes, often without knowing it.”Disguised remuneration has been used by celebrities to avoid income tax and national insurance contributions, receiving a ‘loan’ which was unlikely to ever be repaid, but now the taxman wants his cut.New legislation introduced by former Chancellor George Osborne means these loans are now subject to a charge, which can only be cancelled if a settlement is reached with HMRC.

Thousands of people have already contacted HMRC to register an interest in settling, but John Whelan says there could be thousands more to come forward.He said: “HMRC will consider allowing flexible payments over a period of time, even for celebrities earning large amounts of money. But anyone who is affected needs to act quickly.“The September 30 deadline also applies to anyone who has failed to declare all their offshore income, and those who don’t come forward to declare this kind of tax avoidance could face massive penalties or even imprisonment, so we would recommend taking advice at the earliest opportunity.“Agents and financial advisors could also be dragged into court if the stars fail to cough up.”John added:

“The taxman wants his cut so that could include seizing assets, such as houses, so a settlement with HMRC will always be the best way out. The government has proved that these tax avoidance schemes don’t work.” The government says loans or debts from a disguised remuneration scheme will be taxed as earnings if they haven’t been fully taxed or repaid on or before April 5, 2019. So far, HMRC has received more than 20,000 registrations to settle and are taking these cases through the settlement process.

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