Ten years of the disguised remuneration legislation

Key points

• Third party remuneration rules came into effect in April 2011.
• Much has changed in tax since their introduction.
• The rules were widely drawn and catch many innocent arrangements.
• Repeal is a step too far but broader exemptions would ease some outcomes.

The disguised remuneration (employment income provided through third parties) rules celebrated their tenth anniversary on 6 April. When they were introduced the rules were controversial in the broad way they were structured. However they were implemented in a very different tax landscape from the one which exists now. Many of the concerns HMRC had at the time are no longer so pressing and other powers at the department’s disposal have greatly expanded.

As the ten-year milestone has been achieved it seems a good time to question whether the disguised remuneration legislation remains fit for purpose or should be given a radical overhaul.

Original target

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