Section 10 - Government and HMRC communications about Disguised Remuneration
Published 23 April 2020
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Government and HMRC communications about DR
In the 2000s, generally, the government and HMRC did not communicate its view on particular types of avoidance to the public in targeted communications, such as Spotlights. In the 2000s, other forms of avoidance were much more common than today, such as sideways loss and film tax relief schemes. There are some limited examples of public statements on avoidance generally around this time.
In the 2000s, HMRC communications focused largely on direct communication with tax professionals and large corporate employers. This is because most employment income avoidance at that time was driven by large corporate employers and employers being advised by agents and lawyers.
By 2004, the marketed avoidance was seen as a growing threat to the Exchequer and the government introduced the DOTAS (Disclosure of Tax Avoidance Schemes) regime. Hansard records comments from ministers during the 2004 Finance Bill debates and earlier expressing the government’s determination to ensure that employers and employees pay the right amount of tax.
The written ministerial statement in 2004 is the earliest public statement about employment income avoidance. HMRC began setting out its position publicly, and consistently, on employment income avoidance from November 2009 in its Spotlights series.
HMRC publicised the litigation cases, such as Dextra and Sempra via press releases. HMRC also announced the creation of a team in the Anti-Avoidance Group to challenge similar schemes. Widely used professional websites, such as AccountingWeb and TaxationWeb drew attention to these successes in the courts.
DR avoidance grew more quickly from 2005 to 2006 which involves Self Assessment returns being filed by 31 January 2007 after which HMRC has one year to open an enquiry. Therefore, the extent of the growth of DR would only begin to become apparent in the late 2000s.
Since 2009, HMRC has undertaken a significant amount of public communications in addition to directly communicating with individuals and employers;
- Spotlights 5, 6 , 11, 12, 33, 35, 36, 37, 39, 42, 44, 45, 46, 48, 49, 50 and 51;
- publicity from April 2011 to July 2015 supporting the Employee Benefit Trust Settlement Opportunity;
- publicity from May 2014 onwards supporting the Contractor Loan Settlement Opportunity
- DR settlement terms published on GOV.UK in November 2017 for those wishing to settle their liability ahead of the loan charge;
- a publicity campaign from 2018 onwards ahead of the loan charge and to raise awareness, that has included:
- 7 webinars (plus 2 shortly after the policy was announced in 2016);
- a number of e-bulletins to agents;
- regular entries in the Agent Update and Employer Bulletin;
- articles in trade publications;
- publication of a factsheet and an issue briefing; and
- a social media campaign.
The Spotlight series is targeted at agents, and tax professionals, rather than the wider population. In addition to the page views on GOV.UK, agents share information from Spotlights more widely in their own communication with their clients.
Table 37 below shows the number of page views each DR related Spotlight received per year. The 2019 figures are inclusive of page views up to the end of September 2019. We do not hold any data on these pages prior to 2015.
| 2015 | 2016 | 2017 | 2018 | 2019 | Total | |
|---|---|---|---|---|---|---|
| Spotlight 5 | 884 | 1,544 | 733 | 634 | 704 | 4,499 |
| Spotlight 6 | 393 | 515 | 464 | 456 | 366 | 2,194 |
| Spotlight 11 | 607 | 725 | 714 | 544 | 915 | 3,505 |
| Spotlight 12 | 197 | 217 | 169 | 180 | 264 | 1,027 |
| Contractor Loans | - | 5,699 | 22,757 | 18,324 | 5,539 | 52,319 |
| Spotlight 35 | - | - | 3,934 | 2,839 | 3,022 | 9,795 |
| Spotlight 36 | - | - | 9,386 | 5,595 | 1,961 | 16,942 |
| Spotlight 37 | - | - | 9,945 | 1,221 | 363 | 11,529 |
| Spotlight 39 | - | - | 5,548 | 5,451 | 1,907 | 12,906 |
| Spotlight 42 | - | - | - | 8,773 | 2,464 | 11,237 |
| Spotlight 44 | - | - | - | 9,084 | 5,519 | 14,603 |
| Spotlight 45 | - | - | - | 21,872 | 11,049 | 32,921 |
| Spotlight 46 | - | - | - | - | 2,295 | 2,295 |
| Spotlight 48 | - | - | - | - | 5,578 | 5,578 |
| Spotlight 49 | - | - | - | - | 7,961 | 7,961 |
| Spotlight 50 | - | - | - | - | 2,516 | 2,516 |
| Spotlight 51 | - | - | - | - | 3,663 | 3,663 |
Table 38 below shows the number of page views that the ‘November 2017 Settlement’ guidance received up to September 2019 since it was published in November 2017.
| Month | Views |
|---|---|
| November 2017 | 4,217 |
| December 2017 | 1,725 |
| January 2018 | 1,611 |
| February 2018 | 1,066 |
| March 2018 | 1,702 |
| April 2018 | 3,370 |
| May 2018 | 10,895 |
| June 2018 | 4,441 |
| July 2018 | 5,774 |
| August 2018 | 7,014 |
| September 2018 | 8,516 |
| October 2018 | 4,745 |
| November 2018 | 3,368 |
| December 2018 | 2,852 |
| January 2019 | 3,670 |
| February 2019 | 6,659 |
| March 2019 | 5,660 |
| April 2019 | 4,704 |
| May 2019 | 2,233 |
| June 2019 | 1,854 |
| July 2019 | 2,066 |
| August 2019 | 1,512 |
| September 2019 | 1,383 |
| Total | 91,037 |
Go to section 11: Enquiry letters.