Midlands employers need to review their remuneration practices in light of forthcoming legislation, accountancy firm PwC is warning. New rules could outlaw some forms of avoiding or deferring income tax or National Insurance payments.
PwC is warning companies which use trusts or other finance arrangements, such as personal loan facilities, to reward employees and in doing so, seek to avoid or defer the payment of income tax or National Insurance Contributions (NICs).
Forthcoming legislation, forming part of the Finance Bill 2011, could count such remuneration arrangements as disguised remuneration, which would lead to punitive tax charges.
Rupert Hutton, human resources expert at PwC in the Midlands, said: It is possible that some companies in the region may not be aware that they are rewarding staff in a way that, under the new legislation, would lead to significant upfront tax charges. For this reason, it is vital that they review their remuneration practices early to ensure that they dont get caught out by the new rules.
The new anti-avoidance legislation surrounding disguised remuneration has been worded quite widely, and this could pose problems for some employers if they fail to spot that specific practices are affected.