HMRC has confirmed its view that payments made through managed service companies which are not already subject to PAYE, such as dividends, are to be treated as employment income, following the decision of the FTT in Christianuyi Ltd & Others [2016] UKFTT 272 (TC). The FTT has granted the appellants leave to appeal.
The announcement is made in ‘spotlight 32’, the latest addition to HMRC’s targeted list of tax avoidance schemes, setting out its ‘firm view’ that avoidance schemes using arrangements of this type are ineffective. HMRC stresses that it will ‘investigate and challenge these arrangements via every route open to it, including litigation, and seek full settlement of the tax due, plus interest and penalties, where appropriate’.
Furthermore, spotlight 32 continues: ‘If any part of the tax and NICs are irrecoverable, HMRC will transfer unpaid debts to others, including the service company’s directors, the MSC provider and the MSC provider’s directors and associates. All are jointly and severally liable for the debts.’
HMRC has confirmed its view that payments made through managed service companies which are not already subject to PAYE, such as dividends, are to be treated as employment income, following the decision of the FTT in Christianuyi Ltd & Others [2016] UKFTT 272 (TC). The FTT has granted the appellants leave to appeal.
The announcement is made in ‘spotlight 32’, the latest addition to HMRC’s targeted list of tax avoidance schemes, setting out its ‘firm view’ that avoidance schemes using arrangements of this type are ineffective. HMRC stresses that it will ‘investigate and challenge these arrangements via every route open to it, including litigation, and seek full settlement of the tax due, plus interest and penalties, where appropriate’.
Furthermore, spotlight 32 continues: ‘If any part of the tax and NICs are irrecoverable, HMRC will transfer unpaid debts to others, including the service company’s directors, the MSC provider and the MSC provider’s directors and associates. All are jointly and severally liable for the debts.’
