HMRC Disguised Remuneration Settlements: Resolving Tax Avoidance Schemes

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Tax avoidance schemes involving disguised remuneration have been a subject of concern for tax authorities, including HM Revenue and Customs (HMRC). To address these schemes and ensure tax compliance, HMRC offers Disguised Remuneration Settlements. This process provides individuals with an opportunity to settle their tax liabilities associated with disguised remuneration and rectify past tax avoidance practices. In this article, we will explore the key aspects of HMRC’s Disguised Remuneration Settlements and their role in resolving tax issues and promoting compliance.

Understanding Disguised Remuneration

Disguised remuneration refers to schemes where individuals receive income in a form other than a direct salary or wage, often in the form of loans, to avoid income tax and National Insurance contributions. These schemes typically involve complex structures and arrangements, aiming to disguise income and evade tax obligations. HMRC has identified disguised remuneration schemes as tax avoidance, and it is actively taking measures to address them.

The Need for Disguised Remuneration Settlements

Disguised Remuneration Settlements are necessary to address the tax issues arising from participation in tax avoidance schemes. They provide a mechanism for individuals to rectify their tax affairs, settle outstanding liabilities, and move forward with compliance. HMRC encourages individuals involved in disguised remuneration schemes to come forward voluntarily and engage in the settlement process to avoid potential penalties and legal consequences.

Benefits of Disguised Remuneration Settlements

  1. Resolution of Tax Liabilities: By participating in Disguised Remuneration Settlements, individuals can resolve their tax liabilities arising from their involvement in disguised remuneration schemes. The settlement process allows individuals to rectify past tax avoidance practices and fulfill their tax obligations.

  2. Mitigation of Penalties: Disguised Remuneration Settlements offer individuals an opportunity to mitigate the penalties that may be imposed if HMRC were to pursue investigations independently. By voluntarily settling their tax liabilities, individuals can reduce the financial impact and potential legal consequences associated with non-compliance.

  3. Certainty and Peace of Mind: Engaging in the settlement process provides individuals with certainty and peace of mind regarding their tax affairs. By addressing and resolving past tax avoidance practices, individuals can move forward knowing that their tax obligations are fulfilled and in compliance with HMRC’s requirements.

  4. Cooperative Approach: Disguised Remuneration Settlements encourage a cooperative approach between individuals and HMRC. By voluntarily engaging in the settlement process, individuals demonstrate their willingness to comply with tax obligations and work towards a fair resolution.

The Disguised Remuneration Settlement Process

  1. Notification: Individuals interested in participating in the settlement process must notify HMRC of their intention to settle their tax liabilities related to disguised remuneration. This can be done by submitting a formal notification or contacting HMRC directly.

  2. Disclosure: After notifying HMRC, individuals must provide a comprehensive disclosure of their involvement in disguised remuneration schemes, including details of the income received, the arrangements in place, and the tax implications. Supporting documentation and information are necessary to facilitate accurate assessments.

  3. Settlement and Payment: Once the disclosure is made, HMRC will assess the tax liabilities based on the information provided. Individuals will be notified of the tax due, including any interest or penalties. Payment arrangements can be made to settle the outstanding liabilities.

  4. Future Compliance: Disguised Remuneration Settlements not only address past tax liabilities but also emphasize the importance of future tax compliance. Individuals are encouraged to ensure that their tax affairs remain accurate and up-to-date to avoid similar tax avoidance practices in the future.


HMRC’s Disguised Remuneration Settlements play a crucial role in addressing tax avoidance schemes involving disguised remuneration. By participating in the settlement process, individuals can rectify their tax affairs, settle outstanding liabilities, and move forward with compliance. The settlements provide a mechanism for resolving tax issues, promoting transparency, and ensuring tax compliance. HMRC’s Disguised Remuneration Settlements contribute to the overall integrity of the tax system and the fair treatment of all taxpayers.

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