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Budget clamps down on NI avoidance schemes

21 March 2013

Today’s Budget announced new measures to curb attempts to avoid tax and National Insurance contributions under rules relating to disguised remuneration (DR). These rules were originally introduced from 6 April 2011, with certain anti-forestalling provisions effective earlier from 9 December 2010.  

Mark Groom, tax partner at Deloitte, said: “The DR rules are in essence anti-avoidance provisions aimed at reward, recognition or loans provided through third parties, which might otherwise avoid or defer tax and National Insurance contributions (NIC). Although the legislation is relatively new, it wasn’t long before schemes began to emerge attempting to circumvent the rules.

“HMRC was already considering extending the rules relating to the ‘Disclosure of Tax Avoidance Schemes’ (DOTAS) to ensure that schemes must be registered with HMRC where DR is involved. These proposals are yet to be finalised.

“It is hard to see that schemes intended to avoid legislation, which in itself is ‘anti-avoidance legislation, can be anything other than abusive. These new measures will enable HMRC to target specific cases more easily. In addition, with the Royal Assent of the Finance Act expected in July this year, the General Anti-Abuse Rule (GAAR) will act as a catch all for the most egregious schemes, not already caught by targeted legislation.”  

Ends

Notes to editors:
About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities.

Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited

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